Corporate Dec 4, 2012
The Supreme Court today slammed the Sahara Group for not complying with its order to refund Rs 27,000 crore to its 3 crore investors and adjourned the Sahara vs Sebi case till Tuesday.
The Court gave two Sahara companies 24 hours to decide whether they would comply with the apex court's three-month-old directive to refund Rs 24,000 crore to nearly 3 crore investors through market regulator Sebi or face consequences.
Justice Altamas Kabir flayed the firms for not complying with earlier orders, remarking that the firms' plea does not merit a hearing. "You did not implement our order and went to other forum. It is unfortunate," the bench said.
"You are justifying your conduct which is unjustifiable," the court told Sahara. "Your intention is very shaky... every step taken by you is shaky."
The two Sahara group companies had moved the SC on 20 November , the day the three-month deadline ended for refunding Rs 24,000 crore to investors through Sebi. They came with drafts for Rs 5,126 crore to attempt to prove their bona fides as managers of the investors' money.
The market regulator Sebi insisted that strong action be taken against the Group's companies and said that it has also filed a contempt petition against them. The bench, however, said it is more concerned about the common man, who has invested his money in the companies. "If you want us to send them to jail, we would send them, but we are more concerned about the investments made by the common man," the bench observed.
The apex court had asked Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation to refund an estimated Rs 24,000 crore with an annual interest of 15 percent, while Sebi was directed to facilitate the refund of this money to about three crore investors of the two firms.
The court had asked the companies to furnish the documents related to these investors to SEBI within 10 days and refund the money within three months, failing which the regulator was asked to freeze the accounts and attach properties of the two firms.
On Saturday, however, the Sahara Group, in massive two-page advertisements in the print media confirmed that it hadcleared around Rs 33,000 crore liability in optionally fully convertible debentures (OFCDs), issued illegally by two of its companies, Sahara India Real Estate Corporation and Sahara Housing Investment Corporation.
"We started OFCD in these two companies in 2008-09. Most of the money deposited with us was for 5 to 10 years. But now we have cleared around Rs 33,000 crore liability," the group had said.
On Friday, the Sahara group moved the Supreme Court against the order of the Securities Appellate Tribunal (SAT) dismissing its appeal against market regulator Sebi. SAT haddismissed a Sahara Group plea to receive a final payment of Rs 5120 crore for deposit in the apex court. (This means nearly Rs 19,000 crore has been paid off between August 2011 and now.)
Firstpost has earlier questioned this amount and raised the question if Sahara Group flouted the Supreme Court's orders ? "How did the Rs 24,029 crore owed to 29.6 million investors in August 2011 come down to just Rs 5,120 crore one year later? And that too, conveniently just before the Supreme Court order of August this year, after which no refunds could have been made? Firstpost had asked.
In their appeal before the SAT, two Sahara Group firms had sought the Tribunal's intervention in refund of investors' money and had accused Sebi of wrongly charging them of non-compliance with a Supreme Court order in that regard.
The Tribunal, however, had said that any further direction in the case could be sought and granted by the Supreme Court alone and dismissed the appeal.
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