Decision of Supreme Court
Unhappy with Sahara’s ‘road map’ to repay duped investors by July 2019, the Supreme Court attached the group’s jewel-in-the-crown asset in Maharashtra, the Aamby Valley township.
However, SC ordered Sahara to firstly place on record a list of unencumbered properties to be put up for public auction to recover over Rs. 14,000 crore the group owes as principal. The SEBI lawyer submitted that the total liability is Rs. 36,326 crore.
At one point, Judge asked why the court should even bother to ask Sahara for a list of other properties for public auction when the group already has Aamby Valley, which has a declared worth of Rs. 39,000 crore.
SC judge told the Sahar group “Either you speed up your schedule of repayment or we will go ahead with the auction of your properties to settle your debts. Your 2019 road map is too long.”
In 2014, the Supreme Court of India ordered the arrest of Subrata Roy, chairman and founder of Sahara India Pariwar, for failing to appear in court in connection with the Rs. 14,000 crore deposits his company failed to refund to its investors as per a Supreme Court order, after a legal dispute with the Indian market regulator SEBI (Securities and Exchange Board of India). He remained in Tihar jail for more than two years, and was released on parole in May 2016 to attend the last rites of his deceased mother.
The unravelling of this fraud case started in 2010 and it is still in process in the Supreme Court of India as of 2016.November 2010 – Securities and Exchange Board of India barred Sahara India Pariwar chief Subrata Roy and two of its companies – Sahara India Real Estate Corp (SIREC) and Sahara Housing Investment Corp (SHIC) – from raising money from the public as they had raised several thousand crores through optionally fully convertible debentures (OCFDs) that SEBI deemed illegal.
What are Optionally convertible debentures?
Convertible debentures refers to debentures which can be converted into shares at a later date when debt holder so decides (option to debt holder) after a certain period of time.