Big relief for Sahara as it gets time until Feb for refund

The Supreme Court has asked Sahara to refund about Rs 24,000 crore to three million investors in three installments, in effect giving the group time until February to comply with the repayment order passed earlier by the apex court.

The group sought more time after the earlier deadline ended last month.

The new order comes two days after the court came down heavily on the group for “unjustifiable” conduct and “shady” intention.

The court today directed Sahara to pay Rs 5,120 crore upfront, and allowed it to pay the balance in two equal instalments-one in the first week of January and the next in the first week of February.

The court said it is modifying its August 31 order, according to a report on Times of India site.

If the modified order is not implemented, then SEBI was free to initiate attachment proceedings against Sahara, the SC bench observed, the report said.

Sahara will have to submit all documents to Sebi by 20 December.

In its earlier order on 31 August, the group was ordered to submit detailed documents with the regulator Sebi, if it had refunded to investors any money collected through the controversial optionally fully convertible debentures.

Sahara said in newspaper advertisements on Saturday it had “cleared” some of the funds raised in the outlawed bonds and had maximum outstanding liability of Rs 5,120 crore, which it was ready to deposit with the authorities.

The two Sahara group companies, Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation, had moved the Supreme Court on 30 November, the day the three-month deadline ended for refunding Rs 24,000 crore (including 15 percent interest) to investors through Sebi.

They came with drafts for Rs 5,126 crore to attempt to prove their bona fides as managers of the investors’ money.

The market regulator Sebi insisted that strong action be taken against the Group’s companies and said that it has also filed a contempt petition against them.

The bench, however, said it is more concerned about the common man, who has invested his money in the companies.

The companies had raised about Rs 17,000 crore from 3 million investors through optionally fully convertible debentures.

“If you want us to send them to jail, we would send them, but we are more concerned about the investments made by the common man,” the bench had observed.

The apex court had asked SIRECL and Sahara Housing Investment Corporation to refund an estimated Rs 24,000 crore with an annual interest of 15 percent, while Sebi was directed to facilitate the refund of this money to the investors.

(With inputs from Reuters)