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The curious case of Subrata Roy: Highlights of the Sahara-SEBI story

Thursday, 27 February 2014 - 8:38pm IST | Place: Mumbai | Agency: dna webdesk

The Supreme Court of India on Wednesday issued a non-bailable warrant against Sahara chief Subrata Roy for non-appearance despite a summon and contempt of court. The Securities and Exchange Board of India (Sebi) had asked Sahara to refund over Rs 20,000 crore to investors but Sahara failed to do so repeatedly.

The Supreme Court of India on Wednesday issued a non-bailable warrant against Sahara chief Subrata Roy for non-appearance despite a summon and contempt of court. The Securities and Exchange Board of India (Sebi) had asked Sahara to refund over Rs 20,000 crore to investors but Sahara failed to do so repeatedly. 


Below is an explanation of the case till date starting in 2011: 

-Sebi restricted the promoters and directors of Sahara group companies, Sahara India Real Estate Corporation and Sahara Housing Investment Corporation, from raising any capital through the issue of securities including any form of securities.

-Lucknow bench of Allahabad High Court stayed Sebi's order in January 2011.

-As per the order, Supreme court turned down Sebi’s plea to stop two firms from raising money from investors, but allowed it to seek information and issue advertisements to inform investors that the matter is awaiting investigation.

-Sebi issued a notice on its website cautioning investors against buying debentures of Sahara

-Flummoxed by this, Sahara India Real Estate sent a legal notice to Sebi.

-The Lucknow bench of Allahabad High Court vacated the stay order in 2011 followed by Sebi issuing a public notice alerting investors about ban on money mobilisation by two Sahara group firms.

-Later on, Sahara Group filed a petition in Supreme Court challenging the Allahabad High Court order, which made it mandatory for the company to share full details of investors participating in its fund-raising exercise with Sebi.

-Sahara accused Sebi of defaming the company following this incident.

-SC directed Sebi to proceed with its investigation into financial instruments used by two Sahara group companies to raise money from the public. 

-Sebi directed Sahara firms to immediately refund the money collected through sales of optionally fully convertible debentures (OFCDs) with annual interest of 15%. 

-Sahara appealed in Supreme court again that Sebi has no jurisdiction. 

Sahara chief outside Supreme court on wednesday.

-Supreme court directed Sahara to approach SAT against Sebi order on OFCDs. 

-SAT upheld Sebi order against Sahara to refund money in October 2011.

-Supreme court gave Sahara group companies three weeks duration to choose between two courses to secure the investments made by the public in the scheme -- either to give sufficient bank guarantee or attach properties worth the amount.

-A Supreme Court bench ruled in favour of Sebi and ordered the two Sahara companies to return its OFCD investors the full outstanding amount with interest. 

-Sahara companies filed a review petition in the Supreme Court in October.

-Sahara claimed that it sent documentation to Sebi within the 10-day limit. But Sebi did not accept it as the documents arrived on the 10th day

-Later on, Sebi approached Supreme Court alleging Sahara's non-compliance with the main order. 

-Sebi files a contempt petition against Sahara claiming it had not furnished the investor documents within the court stipulated time in November.

-The Sahara Group got a temporary reprieve from Supreme court as it  granted more time to repay the money. 

-Sahara missed the repayment deadline set up by court and  It was required to submit Rs 10,000 crore by January first week in 2013.

-SC refuses to hear a plea asking for extension of deadline to refund investors money. 

-Sebi moves in to attach properties of the group and group chief in 2013.

-In March, Sahara approached special appellate tribunal against Sebi move to attach properties. 

-While, Sebi sought arrest of Subrata Roy citing Sahara's records were fictional. 

-Sebi files a contempt petition against Sahara in SC saying that the company was flouting SC direction to make refunds as soon as possible. 

-Finally, the apex court barred Subrata Roy from leaving India. 

Subrata Roy moved to Apex court asking for cancellation of non-bailable warrant


UP police try arresting Sahara chief but find him untraceable: 

Police raid Sahara chief’s home, does not find him a team of Lucknow police on Thursday raided the house of Sahara chief Subrata Roy, who, earlier in the day, moved to Supreme Court seeking cancelation of non-bailable arrest warrant issued against him.

Armed with Supreme Court’s non-bailable warrant, the team of Gomti Nagar police station reached ‘Sahara City’ housing his residence  at about 4.30 pm to arrest him but failed to find him there.

High drama marked the police action as the police conducted searches inside the residence. Entry into and exit from the premises, which is spread in over 270 acres, was barred but the police exercise did not yield fruit.

“The team is there to execute the non-bailable warrant issued by Supreme Court”, Circle officer, Gomti Nagar, VS Mishra.

SHO Gomti Nagar Ajit Singh Chauhan said that Roy was not present inside the Sahara Shahar premises.

Earlier in the day, the Sahara Chief offered unconditional apology to the apex court for his non-appearance.

Roy also sought recall of the apex court’s Wednesday order in which non bailable warrant was issued against him and police was ordered to arrest and produce him before it on March 4.

The order to arrest Roy was issued for his failure to appear before the apex court in a contempt case arising out of non refund of Rs 20,000 crore to investors by two of his companies.

A bench of justices K S Radhakrishnan and J S Khehar had rejected Roy’s plea to exempt him from personal appearance on the ground of ill-health of his 92-year-old mother.

Senior advocate Ram Jethmalani, who had appeared for Roy, had produced a medical certificate from Sahara Hospital, Lucknow, on the condition of Roy’s mother and recommended that he be allowed on “humane as well as medical grounds” to be with his mother at this stage.

The bench had said since it had on February 25 declined to grant exemption, it did not find reason to accede to the renewal of the request made yesterday.

The three directors of Sahara Group, who were also summoned along with Roy, had appeared in the court yesterday.

The court had on February 20 come down heavily on the Sahara group for not refunding Rs 20,000 crore of investors money despite its order and summoned Roy, Ravi Shankar Dubey, Ashok Roy Choudhary and Vandana Bhargava, directors of its firms Sahara India Real Estate Corp Ltd (SIREC) and Sahara India Housing Investment Corp Ltd (SHIC) to be personally present before it yesterday.


Also check full reports here: 

Subrata Roy may face arrest; UP police reaches residence


UP police fails to arrest Sahara chief Subrata Roy



Below are the Twitter reactions for the case: 


it is illegal under the Predictable Puns Act to describe Subrata Roy as Be-Sahara!He can still bring out full page adds claiming innocence.

— Abhishek agarwal (@agarwalabhish) February 27, 2014

UP Police reach Subrata Roy 's doorstep after SC issues warrant, only to not find him there. He should have been Azam Khan's buffalo.

— Abhishek agarwal (@agarwalabhish) February 27, 2014

Paisa khilao Police bhagao! Subrata Roy not at home, could not arrest him: UP police. : Well this is India! SR is sipping blue label JW/

— manav (@manavjivan) February 27, 2014

It is illegal under the Predictable Puns Act to describe Subrata Roy as Be-Sahara!

— Madhavan Narayanan (@madversity) February 27, 2014

Subrata Roy Sahara reliving his childhood days by playing Hide & Seek with Police. #Respect

— Haunted Sperm (@The_Sleigher) February 27, 2014

UP Police traces Azam Khan's buffalloes after a statewide hunt; But cant find Subrata Roy

— Gandhi To Nehru (@GandhiToNehru) February 27, 2014

Must b AAP Certified Honest Businessman RT @ggiittiikkaa I didn't hear Kejri badmouthing Subrata Roy for corruption worth 20,000cr. Did you?

— AbhiP (@abhinawp) February 27, 2014


With inputs from PTI and pictures by Manit Balmiki

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