SEBI Requests Subrata Roy’s Arrest

subrata-Roy

After such a long wait, SC will hear arrest request

The news surrounding the Sahara Group and Shri Subrata Roy has been in the news for quite a long time. The latest news comes that SEBI (Securities Exchange Board of India) has moved to the Supreme Court for his arrest. The regulator and unlisted Sahara has been locked in a long-running dispute relating to a Supreme Court order asking the Sahara group to refund more than 24,000 crore rupees of investors’ money raised by the two group firms through the issue of bonds.

SEBI has filed a petition that requests to allow them to-

“Take measures for arrest and detention in civil prison of promoter of Sahara Shri Subrata Roy Sahara and the two male directors, viz., Shri Ashok Roy Choudhury and Shri Ravi Shankar Dubey after giving reasonable opportunity of hearing.”

Apart from that, they have also asked that the two accused be ordered to submit their passports with the court, so that they can’t leave the country. The Supreme Court will hear the petition in the first week of April. And if these two powerful men do get arrested, it will send a powerful message to all the other powerful politicians and businessmen.

The two Sahara Companies- Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC) were told by the Supreme Court to refund the obscene amount of 24,800 rupees- firstly by the end of November and then by the end of February.

Obviously enough, Sahara group denied that they owed that much money and paid only 5,120 crore rupees. The suspicion on Mr. Roy conducting illicit deals has been there for years, but like a disease these funds have spread to his other enterprises, most notably his Pune IPL Team.

Sahara claims to have a number of three crore investors. However, results of a preliminary sample verification exercise done by market regulator SEBI show that just about one per cent of investors in the two Sahara companies responded to SEBI’s registered letters asking them to confirm their investments.

So, if we’re to believe that ninety nine per cent of the believed investors are as fictional as Harry Potter, then all I have to ask is how they kept it under everyone’s eyes for so long. And we should believe so – out of the 21,253 registered letters sent to Sahara investors, only 233 debenture holders responded – a success percentage of just 1.09 per cent. The other 7000 plus letters showed “address not found” or didn’t get returned. Wow, what a con.

subroto-roy-arrest

What wasn’t surprising was Sahara’s response to all this saying that SEBI’s allegations were “absolutely baseless, unverified and malicious”. Now, what’s interesting is this- SEBI got all the investor information from Sahara itself; the documents were scanned by SEBI personnel and they can’t claim that SEBI- the independent regulatory authority, falsified the documents. This falsifying of investor information to get money is known as “benami funding”.

In a recent Indian Express report, “Sebi found that in a batch of 20,000 mailers it sent to investors based on details given by Sahara, more than 8,000 were returned by India Post with the stamp”. This means that out of a batch of eight thousand, only sixty eight people were found to be genuine.  This is more than shocking, but then again the Sahara group has somehow not paid twenty four thousand crores to this date.

Sahara claims that in the past thirty three years, they’ve never received any benami money, but with the results of so many investigations, it’s more worrying to be an actual, real investor in the Sahara companies right now.

This case has been dragging on for so long that the public has lost hope and interest. This can only mean that they feel that the case should have been resolved by now. But nevertheless, Mr. Roy has now gotten himself stuck in one of the nation’s worst cases of alleged contempt of court orders and he’s not the only one involved; SEBI seeks to impound the passports of Ashok Roy Choudhary and Ravi Shankar Dubey and Vandana Bhargava, all of them directors.

The accusations include failure to submit documents on time, in August, December; February and also submission of files in an unacceptable, haphazard manner and especially failure to pay their dues.

It’s high time that the Supreme Court takes this petition request seriously. SEBI, this time has covered all its bases and it seems unlikely that Subrata Roy and his accomplices will get out of this mess this time.

Akhil Thakur

Image Source [http://propertyobserver.in/wp-content/uploads/2013/01/Sahara-group-chairman-subrata-roy.jpg]