It was a day of hectic and dramatic developments in the Supreme Court which heard the Sahara case on Wednesday. Subrata Roy along with two other company directors have been sent to judicial custody till the next date of hearing on March 11. The detention of the fourth respondent, Vandana Bhargava has not been ordered as she has been given a concession for being a woman Director.
The SC has asked the Sahara group to come up with a proposal to repay the money it owes to its investors.
The SC in its judgement said that Sahara maintained an “unreasonable stand throughout the proceedings before SEBI, SAT, High Court and even before this Court. Sufficient opportunities have been given to Sahara to fully comply with those orders and purge the contempt committed by them but, rather than availing of the same, they have adopted various dilatory tactics to delay the implementation of the orders of this Court.”
“Non-compliance of the orders passed by this Court shakes the very foundation of our judicial system and undermines the rule of law, which we are bound to honour and protect. This is essential to maintain faith and confidence of the people of this country in the judiciary. Documents and affidavits produced by the contemnors themselves would apparently falsify their refund theory and cast serious doubts about the existence of the so-called investors. All the fact finding authorities have opined that majority of investors do not exist,” the judgement said adding that the preservation of market integrity is extremely important for economic growth of the country and for national interest.
“Maintaining investors’ confidence requires market integrity and control of market abuse. Market abuse is a serious financial crime which undermines the very financial structure of this country and will make imbalance in wealth between haves and have nots,” the SC said.
Subrata Roy, who was called a thief and had black ink thrown on him by a lawyer from Gwalior while he was being taken to the court, will have to come up with a time bound proposal to repay Rs 19,000 crores. With the apex court already having confiscated large parts of Sahara land bank, new assets will also have to be offloaded.
There is a possibility that Sahara’s off shore investments like Groverhouse hotel in London and a hotel in New York could also come under the hammer.
It is to be seen whether the court’s observation will force the SEBI to examine the “30 truck load” of documents showing existence of depositors in Sahara’s companies.
The SC’s insistence on a cheque or Demand Draft to clear the dues could be the court’s way to tighten the screws on Sahara to ascertain whether the business empire is based on “genuine money”.
Earlier in the day, an emotional Roy folded hands and tendered an unconditional apology to the Supreme Court as he appeared in the court after ignoring summons for over two years. The SC in turn admonished him saying, “We respected you, you failed to respect us.”
Sahara proposed to sell off properties from Wednesday to make payments to SEBI and give bank guarantees within 3-4 months. The Supreme Court though, did not budge and rejected the proposal.
Appealing to the Supreme Court to keep in mind the sprawling Sahara business empire and the 12 lakh employees working in its various enterprises, Roy claimed in the court that he never had a blot on him in his 37-year-long career.