The Supreme Court on Friday asked Sahara to disclose its entities from which it took money to return the Rs 24,000 crore that its two group companies had raised from investors in 2008-09.
The Sahara India Real Estate Corporation Ltd (SIRECL) and the Sahara Housing Investment Corporation Ltd (SHICL) had raised the money through optionally fully convertible debentures (OFCDs).
“You show us that you invested (the money raised through OFCDs) in other schemes and then took from them and paid to the investors,” said the bench of Chief Justice T.S.Thakur, Justice Anil R. Dave and Justice A.K.Sikri as senior counsel Kapil Sibal, appearing for Sahara, repeated the firm’s often reiterated stand that it has returned investors’ money.
Sahara has been saying that – even before August 31, 2012 judgment asking it to return to investors the money the two companies had raised with 15 percent interest – it had returned the money in cash.
“We will close the entire case” if you show the movement of money that Sahara had raised through OFCDs and its journey back, the bench said.
“It would not have fallen from heaven. If you have repaid them, then where did you get this money. How you raised it?” it asked, as it referred to the argument of senior counsel Arvind Datar, appearing for the Securities and Exchange Board of India that the market regulator will not get into the verification of documents relating to investors if Sahara shows the proof the money being returned to them.
“We don’t doubt the capabilities of your client to return thousands of crores to millions of investors in two months’ time,” Chief Justice Thakur said as Sibal reaffirmed that money has been returned.
“It is stranger than fiction,” he observed as the bench said that it was difficult to digest that Rs 24,000 crore were returned in such a short duration.
The court also asked the market regulator to look into from where Sahara is raising money on these properties, expressing apprehension “whether assets are being liquidated cheaply”.
This came in the course of the hearing of an application by Sahara that Rs 300 crore that it had raised as additional amount against its Grosvenor House Hotel in London be deposited towards the amount for getting a bank guarantee.
The court by its August 3 order had asked Sahara chief Subrata Roy to deposit Rs 300 crore to remain on parole, along with two directors – Ravi Shankar Dubey and Ashok Roy Choudhary.
The top court had on March 4, 2014, had sent Roy and two other directors to judicial custody in Tihar Jail for the failure of the group companies to comply with court’s August 31, 2012 order.
The apex court March 26, 2014 had said Sahara will deposit Rs 10,000 crore as part payment of investors’ money as a condition for the release of Roy and two other directors, and out of this, Rs 5,000 crore was to be paid in cash and Rs 5,000 crore as a bank guarantee.
Though Roy and two other have been released on parole, they have yet to comply with March 26, 2012 order for their release.