Sahara Firms, Roy asked to reply SEBI within a week

Supreme Court Orders Sahara Firms and Subrata Roy to Respond to SEBI’s Contempt Petition

Background

The Supreme Court of India has directed Subrata Roy, the chairman of Sahara Group, and two Sahara companies to respond to a contempt petition filed by the Securities and Exchange Board of India (SEBI) within one week.

The Contempt Petition

SEBI’s petition alleges that Sahara Housing Investment Corporation (SHICL), Sahara India Real Estate Corporation (SIRECL), and Subrata Roy have violated every aspect of the Supreme Court’s August 31 verdict. This verdict ordered the companies to refund over ₹24,000 Crore to approximately three crore investors who had invested in their Optionally Fully Convertible Debentures (OFCD) scheme between 2008 and 2011.

Key Allegations

  • Violation of Court Order: SEBI claims that despite the court’s directive, the Sahara entities have failed to repay the investors.
  • Lack of Cooperation: The market regulator alleges that Sahara has not cooperated with it in the refund process.
  • Attempts to Mislead: SEBI further accuses Sahara of trying to mislead the regulator regarding the refund and sale of properties.

Defense and Counterclaims

  • Refund Claim: Sahara firms argue that they have already repaid the investors, contrary to SEBI’s claims.
  • Property Sale: They also claim to have sold the properties in question, though SEBI has been unable to obtain the title deeds necessary for auctioning these properties.

Supreme Court’s Observation

The Supreme Court questioned the propriety of Sahara refunding investors directly when the court had mandated the process to be facilitated through SEBI, hinting at possible manipulation of the judicial process.

Next Steps

The response from Sahara and Subrata Roy within the stipulated one-week timeline will be crucial in determining the next course of action by the Supreme Court in this high-profile case.