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The Supreme Court yesterday declined Sahara Group chief Subrata Roy’s plea for release from jail along with his two directors.
The three were taken into custody on March 4 for non-compliance of August 31, 2012, order to return investors’ money that Sahara’s two real estate companies - Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) - had collected through optionally fully-convertible debentures (OFCDs) in 2008-2009.
“We understand, but nothing has changed,” said the court bench of Justice T S Thakur, Justice Anil R Dave and Justice A K Sikri as senior counsel Rajeev Dhavan urged the court to “kindly consider their release till February 2015”.
Telling the court that Roy and his two directors Ravi Shankar Dubey and Ashok Roy Choudhary were already in custody for about ten months, Dhavan urged the court to “let him come out in house arrest”.
The apex court by its March 26, 2014, order had asked the Sahara’s two real estate companies SIRECL and SHICL to deposit with market regulator Securities and Exchange Board of India (SEBI) Rs5,000 crore in cash and another Rs5,000 crore in bank guarantees as a part payment of Rs17,400 crore of investors’ money collected by then through OFCDs in 2008-2009. This was also a condition for their release from custody.
The amount of Rs17,400 crore that the court by its August 31, 2012, order had directed to be returned to investors has more than doubled as the court by its order had also held that investors’ money would be returned along with 15% interest.
While declining Roy’s plea for release, the court held back its nod to OSS Life Ltd taking over the loan liabilities of its three overseas hotels - Grosvenor House Hotel in London and the New York Plaza and Dream New York hotels in New York - from Bank of China.
The court asked Sahara counsel S Ganesh to address the queries from the amicus curiae Shekhar Naphade, who told the court that loan that Sahara was raising from the overseas finances was hit by the provisions of the Foreign Exchange Management Act (FEMA).
The Amicus Curiae told the court such foreign loans can only be raised for capital investment or investment in infrastructure projects and not for liquidating debts.
