New Delhi, March 15: Markets watchdog Sebi today sought the permission of the Supreme Court to arrest Sahara chief Subrata Roy, a stunning turn of events for an industrialist around whom key players in Bollywood, cricket and politics once orbited.
The Securities and Exchange Board of India (Sebi) has also sought the arrest of two Sahara directors Ashok Roy Choudhary and Ravi Shankar Dubey. The watchdog wants to impound the passports of the three and prevent them from leaving the country without the court’s approval.
Sebi also applied for permission to seize the passport of another director, Vandana Bhargava, but her arrest was not sought.
However, a two-judge bench of Justices K.S. Radhakrishnan and Dipak Misra refrained from taking up the matter on an urgent basis and told Sebi counsel Pratap Venugopal that the issue would come up on the notified date to be fixed by the registry.
Last August, the Supreme Court had ordered the Sahara Group to pay back Rs 24,000 crore to 2.96 crore investors, turning it into the biggest disgorgement exercise anywhere in the world after the flotations were declared illegal.
In December 2012, the group was allowed to pay the money in three instalments. The Sahara Group said it had already paid off most of the investors. The group claimed that it had deposited Rs 5,120 crore with Sebi and that sum was more than enough to meet any outstanding liabilities towards the bondholders of the two companies.
However, Sebi told the court today that “the instalments and other directions” issued by the court were not complied with. “Even the simple directions of furnishing data, giving details of properties, disclosing the nature of the entities wherein the investments has been made, as required by these orders, have not been complied with,” the watchdog said.
In a statement this evening, Sahara said: “Everyday, Sebi is maliciously leaking to media (reason best known to them), one or the other news, without any substance, against Sahara Group, to wreak personal vengeance, by some officers involved in handling the matter.”
The Sahara statement iterated that the group had cleared all outstanding liabilities. “The honourable court did not find any urgency and advised for listing of the matter in due course, after Holi vacations,” the statement added.
The market regulator has sought the detention of Roy and the two directors in a civil prison.
Unlike the inmates of criminal prisons, civil prisoners need not carry out rigorous labour but they are confined within the walls of the jail.
Under the Prisons Act of 1894, “a civil prisoner or an undertrial criminal prisoner shall be permitted to maintain himself, or herself and to purchase, or receive from private sources at proper hours, food, clothing, bedding or other necessaries”, subject to examination and the approval of the inspector-general of the prison.
Sebi also sought permission for issuing public notices seeking applications from genuine investors for refunds.
Sebi officials later affirmed that the market regulator has been able to freeze several bank accounts of the two Sahara group companies — Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL) but refused to comment on the developments in the court.
The regulator has also successfully barred these companies from operating demat accounts that would allow them to trade in stocks.
Last month, Sebi had ordered a freeze on the bank accounts of Roy, the two entities and three group directors and the attachment of their properties.
Roy had gone to the Securities Appellate Tribunal, urging to quash the Sebi order. The tribunal has posted the matter for final hearing on March 23.