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Updated: July 30, 2013 19:06 IST

Sahara chief Subrata Roy to be punished for contempt: SEBI to SC

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Sahara chief Subrata Roy. File photo: Paul Noronha
The Hindu
Sahara chief Subrata Roy. File photo: Paul Noronha

SEBI on Tuesday made a forceful plea to the Supreme Court to punish Sahara chief Subrata Roy along with his two firms and their directors for not complying with its order for refunding Rs 24,000 crore to investors.

Refuting the contention of Roy who had submitted that he cannot be penalised for non—refund of the money by Sahara India Real Estate Corp Ltd (SIREC) and Sahara India Housing Investment Corp Ltd (SHIC), the market regulator said that the business tycoon held 70 percent stake in the companies and liable for contempt of court punishable upto to six months imprisonment or fine.

“By virtue of being promoter of the companies, he holds the same position as that of Directors of the companies and he is also liable for contempt. He is liable for punishment along with other Directors of the companies,” senior advocate Arvind Dattar told a bench of justices K.S. Radhakrishnan and J.S. Khehar.

Mr. Dattar sought maximum punishment for Roy and others under Section 12 of Contempt of Court Act which provides maximum punishment of six months jail term.

“Keeping in mind the magnitude of fund collected by the companies, it is fit case for imposing maximum punishment on Roy and companies,” he said.

“There can not be a clearer case of contempt. Non payment of funds amounts to contempt,” he said, adding that the companies have violated not one but three orders of the apex court.

The market regulator contended that the companies have not complied with apex court orders passed on August 31, December 5 last year on the issue of refunding the amount.

During the argument, the bench asked whether the amount can be recovered from other companies of the group.

SEBI contended that action can be taken against other companies as the money collected were invested in other companies of the group which is being headed by the same promoter.

The court was hearing three contempt petitions filed against Roy, the two firms and their directors who will present their case on the next date of hearing on August 6.

The apex court had on August 31 last year directed the Sahara group to refund the amount by November end. The deadline was further extended and companies were directed to deposit Rs 5120 crore immediately and Rs 10,000 crore in first week of January and remaining amount in first week of February.

The group, which had handed over the draft of Rs 5,120 crore on December 5, has failed to pay the rest of the amount, SEBI told the court.

The apex court had on August 31 last year directed the two Sahara group companies to refund the money to their investors within three months with 15 per cent interest per annum. It had also said that SEBI can attach properties and freeze bank accounts of the companies if they fail to refund the amount.

The two companies, their promoter Roy and directors Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary were told to refund the collected money to the regulator.

SEBI said the Sahara group had also published advertisement in newspapers on September 3 last year giving its view on the apex court’s judgement, which also amounts to contempt.

The bench after going through the content of the advertisement said in a lighter vein that nothing in it amounts to contempt and the point raised in it pertains to SEBI.

“This is not contempt. Expression used in the advertisement is for you,” the bench told SEBI.

The forceful plea of SEBI against sahara went in vain in the court room. The company had already submitted Rs 5,120 crore by way of a draft and shall definitely demand for the excess back from SEBI after adjustment of refunds.

from:  Ashmita
Posted on: Jul 31, 2013 at 16:41 IST

Long live sahara, SEBI’s attempts to prejudice sahara failed again. SEBI
had referred to an advertisement appeared in the news paper on 3rd Sept.
2012 calling it as an instance of contemptuous conduct of Sahara however
on referring to the said publication, observed that the same does not
amount to contempt as indicated by SEBI and ordered SEBI to not focus on
further advertisements.

from:  Kavita
Posted on: Jul 31, 2013 at 16:40 IST
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