The curious case of

Subrata Roy:
Highlights of the Sahara-
SEBI story

The Supreme Court of India on 24 FEB 2014 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 Sebis 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.


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.