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Subrata Roy, 3 Execs Appear Before Sebi

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Market regulator Securities & Exchanges Board of India (Sebi) on Wednesday, 10 April 2013, questioned Sahara group chief Subrata Roy and three other top executives about their assets and investments in connection with the high profile case involving refund of an estimated Rs 24,000 crore to over three crore investors.

In their personal appearance that lasted for about one hour, Roy and three other directors of Sahara companies were asked about their personal assets as also those of the companies so that Sebi can proceed with sale of these assets to realise the funds for refund to investors.

Often described in media reports as a billionaire, the boss of India's unlisted Sahara conglomerate said on Wednesday, 10 April that he had assets totalling roughly Rs 5 crore ($915,200).
Sebi had summoned Roy, Ashok Roy Choudhary, Ravi Shankar Dubey and Vandana Bhargava for a personal appearance before its whole time member Prashant Saran through an order issued on March 26.

After his appearance, Roy told waiting reporters that he was asked about his personal assets which he thought was a point for concern for Sebi.

"My personal assets appear to have troubled Sebi," he said, while adding that most of the investors had been paid back and the remaining money to be refunded was with the market regulator.

Roy said he was asked by Sebi whether he had any assets beyond those declared by him. "I was asked about my personal assets and I told them that I have declared all my assets."

He said that Sahara group was concerned about delay in refund by Sebi and accused the regulator of not having taken any steps for months together to return the money to those investors who have not been refunded as yet.

Sahara chief said Sebi's questions were limited to his personal assets and the regulator was not taking any steps for returning investors' money from Rs 5,120 crore submitted by the group to Sebi.
During their personal appearance, they were asked to produce original title deeds of all assets and investments of the two firms, Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL).

Roy Worth Rs 5 Crore?
Roy told reporters his assets included gold ornaments and gemstones worth about Rs 3 crore, fixed deposits of Rs 1.59 crore and cash and bank deposits of Rs 34 lakh. He said he had no "immovable property," or real estate.

Roy, besieged by journalists when he arrived at SEBI headquarters, said he had a loan of Rs 11 crore for a sugar mill in the eastern state of Uttar Pradesh, where his company is headquartered.

Sahara has gained a global profile in recent years through its acquisition of London's Grosvenor House hotel and the Plaza Hotel in New York.

Roy says he espouses a philosophy of "collective materialism" and according to Sahara's website, the group shares its profits between staff, its internal fund and social development activities and has never declared a dividend.

Sebi Summons Issued On March 26
The summons for personal appearance of Roy and three other directors of two Sahara firms were issued by Sebi on March 26 to examine them for ascertaining details of their personal assets, as also the investments and assets of the companies, to move ahead with sale of immovable assets for realisation of money to be refunded to the investors.

In the same order, the two Sahara firms and their four top executives were also asked to provide details of their assets and investments to the market regulator by April 8.

It could not be ascertained whether these details have been furnished before Sebi as per the orders.

Roy and others (Ashok Roy Choudhary, Ravi Shankar Dubey and Vandana Bhargava) have been ordered to appear before Sebi's whole-time member Prashant Saran.

If these persons fail to appear before Sebi as ordered, the regulator has said it would ex parte settle the terms of proclamation of sale of their and the companies' assets.

The group on various occasions, including through newspaper advertisements, has accused Sebi and its top officials of not providing an opportunity to meet Sahara chief Subrata Roy and others for presenting their points of view.

Incidentally, the Securities Appellate Tribunal (SAT) is scheduled to hear later this week, on April 13, the appeals filed by Subrata Roy and others against a previous Sebi order for attachment of their bank accounts, assets and investments.

These properties include those related to the group's Aambey Valley resort town near Pune, other real estate assets in Delhi, Mumbai and at other places across the country, shares, mutual funds and various other investments.

During their personal appearance tomorrow, Roy and other three top executives have also been asked to produce original title deeds of all assets and investments of the two firms, Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL).

Besides, they have been asked to furnish details of their bank accounts (in India and abroad), and the complete books of accounts along with income tax returns and wealth tax returns filed by the two companies from fiscal 2007-08 onwards.

Later this month, the Supreme Court would also hear a plea by Sebi seeking orders for Roy's arrest and barring him from leaving the country.

The two Sahara firms, SIRECL and SHCIL, have been asked by the Supreme Court to refund over Rs 24,000 crore to their bondholders within three months.

In this apex court order dated August 31, 2012, Sebi was asked to facilitate the refund after verifying genuineness of the investors.

Later on December 5, 2012, the court gave additional time to Saharas and asked it to make an immediate payment of Rs 5,120 crore, followed by Rs 10,000 crore by first week of January and the remainder by first week of February.

After the group failed to make the payments as per the orders, Sebi ordered freezing of accounts and attachment of assets. Sahara claims that it has already repaid most of the investors directly and its total outstanding refund liability was less than Rs 5,120 crore, which it has given to Sebi.

Sebi had passed the attachment orders within days of the Supreme Court saying that the market regulator was free to freeze accounts and attach properties if Sahara group firms were not depositing the money with it for refund to investors.

In two separate attachment orders against SHICL and SIRECL, together running into 160 pages, Sebi had said that the two firms had raised Rs 6,380 crore and Rs 19,400 crore respectively from bondholders and "various illegalities" were committed in raising of these funds.

In these orders, dated February 13, 2013, Sebi had also asked the two firms and their four top executives to provide details of their movable and immovable properties, investments, among others, within 21 days.

However, Sebi last month said that these orders were not complied with and therefore it had to pass another order to move ahead with sale of assets for realisation of funds required to be returned to the investors.