Sahara asked to submit title deeds to Sebi

Apex court says the Roy-led group 'indulges too much in hide-and-seek'.



The Supreme Court on Monday directed the Sahara group to hand over title deeds of property worth Rs20,000 crore to the Securities and Exchange Board of India (Sebi) within three weeks.

The direction came in a contempt petition filed by Sebi against Subroto Roy (pictured), the promoter of Sahara India Real Estate and Sahara Housing Investment Corp which had raised around Rs24,000 crore through optionally fully convertible debentures in violation of public issue norms. The larger context pertains to the firms’ repayment defaults that hurt thousands of investors.

A bench of Justices K S Radhakrishnan and J S Khehar directed Sahara to get the valuation report done by an approved valuer of the properties before submitting it.

The court that had initially proposed restricting movement of contemnors outside India until such time the original documents were submitted to Sebi. However, after assurances from Sahara counsel C A Sundaram, the court settled for a milder direction which will come into play only if the group fails to submit the documents.

“You indulge too much in hide-and-seek, we cannot trust you any more,” Justice J S Khehar told Sahara while directing it to hand over a valuation report of its properties.

The court has told the group that if the title deeds are not handed over in three weeks, then Sahara chief Subrata Roy and other directors will not be allowed to leave the country without its permission.

“There is no escape and the money has to be paid,” the bench told Sahara.

Sahara has to give the property documents to Sebi by November 11 and the Supreme Court will take up the case on November 20. The Supreme Court had earlier asked Sahara and Sebi to find a mechanism for the group to refund around Rs19,000 crore to investors.

Counsel for Sahara suggested an alternative method of a bank trustee arrangement and produced a letter from PNB Investment Services, a subsidiary of Punjab National Bank, which had offered its services to take into possession title deeds worth Rs20,000 crore and liquidate and produce money on directions of the Supreme Court, as and when required.

However, Sebi counsel Arvind Datar was completely against the proposal to take any payment other than cash and submitted: “You played with fire, you can’t complain of burnt fingers. You have taken money from investors. You said your properties are worth Rs71,000 crore. All I am saying is sell one-third of that property and pay the money.”