Get ready for the judgment day

Unless somebody springs a surprise, which seems unlikely as of now, the case will end this Thursday. June 14, the last day at office for the Supreme Court’s vacation bench which has been hearing the Sebi-Sahara case, is most likely to be the Judgement day.

The judgment, whichever way it goes, will have the most widespread impact in terms of number of people and amount of money involved. Between them, Sahara India Real Estate and Sahara Housing Investment have some 30 million investors. The amount in question is at least Rs 24,029 crore plus interest –that’s $4-5 billion.

I can’t think of any recent case where so much was at stake for so many. The much publicised 1996 direct action suit in the US, later immortalised by Julia Roberts in Erin Brockovich vs Pacific Gas and Electric, looks like chicken feed in front of this. The eventual compensation there was $333 million and the number of beneficiaries around 600. Phew.

In hindsight, I feel ashamed that I didn’t even have a whiff of one of the largest money raising operations in the country when I met Sushanto Roy on the eve of Diwali of 2009. I was working with another newspaper then and Sahara Prime City, of which Roy was the CEO, had filed its draft red herring prospectus with Sebi.

I was not covering Sahara group on a regular basis— my interest as similar to that of the market regulator – was limited to the fact that they are planning to approach the capital market through an initial public offering, which was my field of activity.

I had briefly followed a lead that Sahara had some alternative plans after the action by the Reserve Bank of India (RBI) against another group firm in 2008, but soon hit a dead end there. Roy also said those plans would follow the RBI-decided timeline. So, after a long free-wheeling chat, which resulted in this interview, https://bsmedia.business-standard.combit.ly/7a0y3t, Sahara was virtually off my radar.

However, the interview had an unintended consequence. Towards the end of January of 2010, I received some hate mails referring to the interview, one of which told me that I had missed the woods for the initial public offering (IPO) tree, which led to some intense googling and some non-desktop reporting.

In early February 2010, a colleague and I wrote the first story, presenting to the world an obscure animal called “housing bonds”, which offered 600 per cent returns over 15 years. http://bit.ly/MtgLtK.

Two weeks later, we wrote a more detailed story about Sahara’s optionally fully convertible debentures. http://bit.ly/abqge2. The story discussed the critical points of the case regarding what amounts to a public issue, raising money from over 50 people and the convertible nature of these debentures, which are among the questions of law to be decided by the apex court on the judgment day.

Since then, I have clung on to this roller coaster ride as the story sailed through the Allahabad high court, Delhi’s power corridors, defamation suits, Sebi orders and the Securities Appellate Tribunal over the past two-and-a-half years before reaching the apex court. And, by some weird coincidence, I am in the capital, lapping up the rare opportunity of sitting through the last lap in Court No 5.

In the process, I have learnt a lot about the peculiarities of the Companies Act, 1956, the lucrative business of corporate lawyers and the difficulties of being a regulator. Read Business Standard stories on the roller coaster here: http://bit.ly/KXB3jO.

The fact that the entire case can be crunched into a capsule of 30 months is in itself a big salute to our much-maligned legal system. Justice not delayed is justice not denied.