Mumbai: Sahara group founder Subrata Roy had to spent two years in prison after he was arrested on February 26, 2014 in a case that involved non-payment of investors' money. Roy was granted bail by the Supreme Court in early 2016. In March, 2014 he along with two other directors of Sahara group was shifted to the high-security Tihar jail.
Industry watchers were surprised as to why Subrata Roy languished in jail for two long years despite the fact that he could have easily jumped bail by paying the dues to the investors. As, they say, there is huge gap between Roy's personal wealth and dues to the investors.
Based on media reports, Sahara group owes Rs 36,000 crore to investors that he needs to pay back to them. The case was brought to court as, according to media reports, Sahara did not stick to industry rules and flouted market regulations.
Back in 2016, Sahra counsel Kapil Sibal while arguing in favour of Roy's bail plea in the Supreme Court had told the bench hearing the case that Sahara boss would not run away as he holds ample assets and properties. Sibal had also revealed in the same hearing that Roy has already deposited Rs 12,000 crore with Sebi.
The case is related to Optionally Fully Convertible Debentures which Sahara group issued only "after taking permission from the Registrar of Companies at Ministry of Corporate Affairs". The OFCD is a fund-raising instrument that companies use to collect money from markets.
The Securities and Exchange Board of India regulates India's capital market and acts as a nodal agency for any fund-raising activity at the stock market or from the public. Sebi objected that Sahara violated market rules, as it did not file with Sebi the Draft Red Herring Prospectus (DRHP) for raising funds. For companies who want to raise funds, it is necessary to submit a DRHP with Sebi and also seek its permission, which Sahara did not do.
While Sebi raised some 'valid' objections, Sahara group defended its action of seeking permission from the Registrar of Companies at the Ministry of Corporate Affairs. Sahara in its defence had argued that OFCD was a 'hybrid product' that does not come under the jurisdiction of market regulator Sebi.
The Supreme Court back in early 2016 while scanning the documents detailing Roy's personal wealth raised serious questions, as according to the bench Roy's personal wealth seemed to be much higher considering the total dues to investors.
On Monday, the Bombay High Court asked its official liquidator to trigger the process of auction of Aamby Valley, Sahara group's hill-station city near Pune. The City is valued at Rs 37,392 crore reserve price. Roy had requested the Supreme Court to stay the auction in a plea he filed last week, which the SC had rejected.
