SC prevents Subrata Roy from leaving India

Tightening the noose around Sahara group for not refunding Rs 20,000 crore (Rs 200 billion) to investors, the Supreme Court on Thursday barred its chief Subrata Roy from leaving the country.

The court also restrained the group from selling any of its properties.

The apex court said that its order for handing over title deeds of Rs 20,000 crore unencumbered properties to Securities and Exchange Board of India was not followed by the group in ‘letter and spirit’.

The court prevented Roy along with other directors of the group Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary from leaving the country.

A bench of justices K S Radhakrishnan and J S Khehar directed that none of the company in the group would part away any of its properties without its permission.

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During the hearing, senior advocate C A Sundaram, appearing for Roy, tried his best to convince the bench that it has complied with its order but Sebi demolished his arguments saying that the group overvalued its properties and did not hand over all original title deeds of assets worth Rs 20,000 crore.

Sebi's counsel and senior advocate Arvind Dattar informed the court that the group’s 106-acre land in the western suburb of Versova has been valued at Rs 19,000 crore (Rs 190 billion) while its official value is only Rs 118.42 crore (Rs 1.18 billion).

He also said that land cannot be used for any development as it falls within the green zone.

The bench agreed with Sebi counsel’s contention saying such valuation is not acceptable and asked Dattar to find other properties of Sahara which can be considered as surety for Rs 20,000 crore.

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Sahara had given Sebi documents of two plots of land.

One of the two is the 106-acre land in Versova and the other is a 200-acre land in Vasai, which it estimates to be worth about Rs 1,000 crore (Rs 10 billion).

The valuation of the properties was challenged by Sebi.

Holding that the group was playing ‘hide and seek’ and cannot be trusted any more, the apex court on October 28 directed it to hand over title deeds of its properties worth Rs 20,000 crore to Sebi with a warning that failure to comply its order to the satisfaction of the market regulator within three weeks would mean Sahara chief Subrata Roy could not leave India.

The court was hearing three contempt petitions filed by Sebi against Roy, the two firms --Sahara India Real Estate Corp Ltd and Sahara India Housing Investment Corp Ltd -- and their directors.

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On August 31 last year, it had directed the Sahara group to refund Rs 24,000 crore (Rs 240 billion) by end of November.

The deadline was later extended.

The companies were directed to deposit Rs 5,120 crore (Rs 51.2 billion) immediately and Rs 10,000 crore (Rs 100 billion) in first week of January and the rest in first week of February.

The group, which handed over the draft of Rs 5,120 crore on December 5, failed to pay the remaining amount.

The two companies, their promoter Roy and directors Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary were told to refund the collected money to the regulator.