The Supreme Court on Friday gave Sahara Group chief Subrata Roy a "final chance" to raise Rs.10,000 crore -- Rs.5,000 crore in cash and Rs.5,000 crore in bank guarantee -- to make part repayment of investors' money raised by the company in 2008 and 2009 -- which is also a condition for his and two other directors' release from custody.
Noting that earlier two attempts by Sahara to raise the money got "aborted", a bench of Justice T.S.Tkakur, Justice Anil R. Dave and Justice A.K. Sikri decided to give a last chance as senior counsel Kapil Sibal told the court that they were "hopeful" that their attempt to raise money would succeed and Sahara would be able to comply with the court's order.
The court recorded the statement of Sibal appearing for Roy that "earlier two attempts have aborted and a final chance be given to discharge its obligation".
Roy and two other directors Ravi Shankar Dubey and Ashok Roy Choudhary are currently in custody since March 4, 2014, for the failure of group companies SIRECL and SHICL to comply with the apex court's August 31, 2012 and December 5, 2012 orders to return the investors' money which in 2012 was Rs.24,000 crore. This amount on account of interest component has increased substantially.
For Sahara's "final chance" to raise the money, the court extended the communication facilities, including a laptop, to Roy and two other directors from the existing two hours a day to five hours. However, it declined their plea for extension of being shifted to the conference hall of the Tihar Jail court complex.
The court directed Sahara to submit the outlines of the current proposal it was negotiating with an off-shore lender to market regulator SEBI and amicus curiae Shekhar Naphade so that they could examine its seriousness and if it was worth pushing. It asked Sahara to extend full co-operation to the SEBI and Naphade and give any clarification they may seek.
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Noting that earlier two attempts by Sahara to raise the money had failed, the court said: "We are also thinking of appointing a receiver to auction Sahara assets to raise the money in a transparent manner."
After all, the orders of the court have to be taken to a logical conclusion, the court observed saying that a person should not remain in custody indefinitely and it was also not good for the system.
Urging the court not to embark on such a course, Sibal said: "Please don't do that. If my hands and feet are tied, how can I walk? Give me that little time. The real estate market is in doldrums and has collapsed. I must get a fair price, satisfy the court and also not be taken for a ride."
Observing that Sibal "appeared to be hopeful", the court, however, indicated that if a third attempt also fails, then the court will embark on appointing a receiver to secure the compliance of its order.
At the outset, Sibal contested the Reserve Bank of India's contention raised in the court on February 24 on Sahara India Financial Corporation Ltd, wrongly giving the proceeds of FDs, bonds and securities to the tune of Rs.484.67 crore to its partnership firm Sahara India instead of depositing in the "SEBI Sahara Refund Account" as directed by the court, contending these were not covered by the court order restraining Sahara from alienating any of its assets.
Asking SEBI to respond to the submission by Sahara, the court fixed March 23 for further hearing of the matter.