Supreme Court gives Sahara more time to repay investors

NEW DELHI Wed Dec 5, 2012 7:47pm IST

1 of 2. Commuters walk past a billboard advertising the Sahara News Network, along a road in Noida on the outskirts of New Delhi September 20, 2012.

Credit: Reuters/Mansi Thapliyal/Files

Related Topics

NEW DELHI (Reuters) - The Sahara conglomerate was given more time by the Supreme Court to repay billions of dollars to millions of small investors who bought the company's bonds that were later ruled to be illegal.

The court on Wednesday asked Sahara to make an initial deposit of 51.2 billion rupees with the capital markets regulator SEBI and pay 100 billion rupees in the first week of January and the remainder in the first week of February.

Unlisted Sahara, one of India's biggest business groups and a household name through its sponsorship of the national cricket team, was ordered on August 31 to repay within 90 days sums raised by what the court called "dubious" means from nearly 30 million small investors, with 15 percent interest a year.

It is not yet clear how much Sahara has to repay in total as the regulator, which is overseeing the refund process, is yet to scrutinise the investment documents. After the court ruling on Wednesday, Sahara said it was ordered to pay 174 billion rupees along with interest.

It said in a statement quoting one of its lawyers that its auditor had certified its outstanding liability on the bonds to be 26.2 billion rupees. Sahara has said it has already redeemed most of the funds to bond investors.

Lawyers for the regulator have estimated the payout to be about 240 billion rupees plus interest of 15 percent a year.

A copy of the court's Wednesday order was not available.

The top court had asked Sahara in August to deposit the amount with the capital markets regulator. It had also ordered Sahara to submit detailed documents with the regulator if it had refunded any money collected through the outlawed bonds.

The case was back in court after the regulator said Sahara had not complied with the order, while Sahara argued the regulator "deliberately refused" to accept documents and information submitted by it.

The court granted extra time to Sahara despite objections from lawyers representing the Securities and Exchange Board of India (SEBI), a lawyer for the regulator said.

Sahara, whose interests range from finance and real estate to sports, has acquired a string of trophy properties in recent years, and recently bought the Plaza Hotel in New York.

In 2008, the Reserve Bank of India ordered a Sahara company to stop taking deposits from the public.

SEBI issued advertisements in late October saying it had received complaints from investors that they were being "forced" by Sahara agents and officials to switch the money held through the banned bonds to other investment products sold by the group.

Sahara has sought a review of the court's August order. The court is yet to give a verdict on the review petition. (Editing by Tony Munroe and Mike Nesbit)

FILED UNDER:

Reuters Showcase

GDP Growth

GDP Growth

India revises up 2013/14 GDP growth to 6.9 percent.  Full Article 

Adani Restructuring

Adani Restructuring

Adani hives off power, ports businesses to boost growth.  Full Article 

Bank of Baroda

Bank of Baroda

Q3 net profit down 69 pct on higher provisions  Full Article 

Trading Fees

Trading Fees

BSE slashes fees in FX derivatives battle with NSE  Full Article 

SpiceJet Turnaround

SpiceJet Turnaround

SpiceJet board approves up to $243 mln share sale plan  Full Article 

Currency Market

Currency Market

RBI urges companies to hedge FX exposure  Full Article 

Banking Sector

Banking Sector

Banks say no room to cut lending rates, thwarting RBI easing  Full Article 

ICICI Results

ICICI Results

ICICI sets quarterly record profit as Q3 net rises 14 pct  Full Article 

Reuters Poll

Reuters Poll

RBI seen holding rates steady on Tuesday, minority of analysts expect cut  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage