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The Supreme Court today allowed jailed Sahara chief Subrata Roy to stay in a conference hall in the Tihar court complex for ten working days to negotiate with prospective buyers of the group's assets. The court directed the Delhi government to notify the hall as 'jail' so that daily movements between the barracks and the conference hall was not required and negotiations could be done beyond 8 pm, the official lock-in time of the jail.
However, the court did not allow the Sahara group's request for the three support staff to stay overnight with Roy. The prison authorities said all visitors including the two secretaries and a technical support person cannot stay in the facility declared as jail beyond 8 pm.
Delhi government is likely to issue the necessary notification on Monday and the deal talks could begin on Tuesday (August 5). The two Sahara group directors Ravi Shankar Dubey and Ashok Roy Choudhary, who have been imprisoned along with Roy since March 4, will also accompany him in the new 'jail.'
The move could enable the group to raise the money required for their interim bail of the trio by selling hotel assets in London and New York. The court had granted a conditional bail on payment of Rs 10,000 crore -- one half in cash and the other half in bank guarantee. The group has so far deposited around Rs 3,100 crore.
However, Sebi counsel Arvind Datar raised concerns that while the focus has been on getting the trio out on bail, nothing has been done on the swelling dues as the interest clock keeps ticking. According to the Supreme Court's order of August 2012, the two Sahara companies were required to refund Rs 24,029 crore with an interest of 15%. Datar said dues are now over Rs 39,000 crore. "The larger concern is the interest keeps mounting. Months and months are passing. They have not taken one step in repaying," the Sebi counsel added, " Please ask them to submit a plan when they are selling and what."
Sahara counsel KTS Tulsi said:" Our priority is to fulfill the conditions of liberty. Once he is out, circumstances would be different, value of property and price will be different."
Judge T S Thakur said that Sebi's concern is legitimate and underlined that the bail, when it materialises would be interim and if the remaining sum is not paid within reasonable time, the accused may have to return to jail. Tulsi said the group is conscious of the situation day and night.
At one point, when the Sahara lawyers brought back the argument of having refunded bulk of the bond holders already and pointed out that they did so by cash flow from other operations such as Qshop, Judge Thakur asked, " If you have taken the money from other such schemes to refund these investors, How are you going to handle those other depositors (when they come for refund)?"
The proceedings got a twist from the income tax department, which told the court that it has passed assessment orders against the two Sahara firms for a sum which was similar to the bail amount. The department's counsel said, "The entire sum raised by the two firms have been declared as undisclosed income and we have passed orders for recovery of Rs 10,049 crore towards income tax dues."
He said the department's survey found that most depsitors were 'non-existent.' Harish Salve, an expert in tax laws, appearing for Sahara pointed out that there is an "inherent inconsistency" in the positions of Sebi, which says it wants to refund investors and the income tax deparment, which says there are no investors. " It can't be both," Salve said.
The judges also expressed concern over Sebi's progress on refunds, when Datar informed the court that only Rs 1.08 crore has been refunded so far.
