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SEBI asks Supreme Court to allow arrest of Sahara boss
An electronic billboard advertising Sahara Group is seen on top of a building at a residential area in Mumbai March 15, 2013.
Credit: Reuters/Danish Siddiqui
NEW DELHI |
NEW DELHI (Reuters) - The Securities and Exchange Board of India (SEBI) is seeking court approval to arrest the head of the Sahara conglomerate, which it accuses of failing to comply with an order to repay billions of dollars collected from investors in outlawed bonds, according to a court document and a lawyer present at a Friday court hearing.
The Supreme Court is likely to hear the matter next month, the lawyer told Reuters, declining to be identified because he was not authorised to speak with the media.
Sahara, in a statement late on Friday, said it had complied with the court's order and that its total liability was less than the 51.2 billion rupees it had deposited with the regulator.
The application, a copy of which was seen by Reuters, asks that the court pass an order allowing SEBI "to take measures for arrest and detention in civil prison of ... Subrata Roy Sahara ... after giving reasonable opportunity of hearing".
SEBI's application also asks the court to authorize the arrest of two Sahara directors.
The regulator, which has waged a lengthy battle with unlisted Sahara and its head, Subrata Roy, offered no comment.
Last month SEBI ordered a freeze on the assets and bank accounts of two Sahara Group companies as well as on all bank accounts and properties in Roy's name.
Sahara, a household name in India for its sponsorship of the national cricket team, owns the Grosvenor House hotel in London and last year bought the Plaza Hotel in New York.
The group was ordered in August to repay sums raised by what the court described as "dubious" means from nearly 30 million small investors, along with 15 percent interest a year.
The two Sahara firms had raised a total of 257.8 billion rupees in the outlawed bonds as of April 2011, according to Sahara court affidavits cited by SEBI.
In December, the court ordered Sahara to pay an initial deposit of 51.2 billion rupees with SEBI, another 100 billion rupees in the first week of January and the remainder in the first week of February.
Sahara said last month that its total liability was unlikely to exceed the 51.2 billion rupees it had deposited with the regulator.
(Reporting by Devidutta Tripathy; Writing by Tony Munroe; Editing by Ron Popeski and Jane Baird)
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And what does it say about how weak the Indian system is at putting a break on charlatans who are out to collect money from gullible small investors in the villages by making false promises?
There are probably many more smaller versions of “Sahara” who are still collecting money by promising to “double” the amount invested in one year. Of course, people in villages will be “enticed” when you tell them: if you invest 50,000 rupees in my scheme today, I will pay you 100,000 rupees one year from now.
@sachi_bbsr
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