The Supreme Court has once again come down heavily on the ‘Sahara Pariwar,’ as the group likes to be called. On November 20, the group’s promoter, Subrato Roy, and a few other directors were restrained from leaving the country or selling any of its immovable properties without the court’s permission until they complied with the court's earlier order to deposit with the capital market regulator, SEBI, title deeds of properties of a market value of about Rs.20,000 crore. That is approximately the amount that Sahara has been ordered to return to a very large number of investors in its controversial issue of optionally fully convertible debentures (OFCDs),which it claimed to have mopped up through the private placement route. In 2011, SEBI ruled the debenture issue illegal, after which the Sahara group has gone on a spree of litigation at different forums, basically challenging the capital market regulator’s jurisdiction. Successive failures — at the Allahabad High Court and the Securities Appellate Tribunal — have not deterred the group from prolonging the legal battle. A landmark Supreme Court judgment of August 31, 2012 comprehensively upheld SEBI’s stand and directed the Sahara group to furnish information on the OFCD and repay depositors within stiff deadlines, but it has found ways to dodge the order. The group seems to have an endless supply of money for publicity and has prolonged its case, which in terms of mere common sense, should have been closed a long time ago. It remains to be seen if the severe restraints that the Supreme Court has placed on Mr. Roy and the Pariwar very recently may be enough to ensure compliance.

The strong language used by the Supreme Court to admonish the group is not likely to have the desired effect. Earlier this month, the Supreme Court chastised Sahara and its lawyers for “making a mockery of our order” and “playing hide and seek” with the highest court. Sahara had deposited photocopies of title deeds instead of the originals. A few properties in Mumbai have been found to have a significantly lower value than was claimed. Such acts of brazenness have characterised Sahara’s defiance right from the beginning. In response to the Supreme Court’s order, it sent to SEBI’s office in Mumbai truckloads of what proved to be mostly useless information on OFCD investors. Sahara’s much-touted political connections — which run across the spectrum — have helped, and will obviously come in handy in an election year. Not surprisingly, none of the political leaders, whether from the ruling alliance or outside, has had anything adverse to say on this extremely opaque group.

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