Guarantor pulls out: Subrata Roy deeper in trouble as refund amount rises to Rs 36000 cr

The Supreme Court on Friday asked jailed Sahara chief Subrata Roy to furnish Rs 5,000 crore in cash and a bank guarantee of equal amount to secure his release from the prison. Roy will, however, remain in jail as senior advocate Kapil Sibal appearing for him told the court that there was a difficulty in furnishing the bank guarantee of Rs 5,000 crore as one of the financial institutions had backed out. A bench of justices TS Thakur, AR Dave and AK Sikri, while pronouncing its order, said, “We have accepted the format of bank guarantees”, subject to certain conditions. [caption id=“attachment_2303140” align=“alignleft” width=“380”] Supreme Court asked Subrata Roy to pay Rs 10,000 crore to secure his release. PTI[/caption] The court also asked the 65-year-old Roy, who has been in Tihar jail since 4 March, 2014, to pay Rs 36,000 crore to the SEBI within 18 months and in nine instalments from the date of release. It allowed market regulator SEBI to encash the bank guarantees to be furnished by the Sahara chief, in case he defaults in the payments of two instalments. The bench further said that if Roy defaults in payments in three instalments, then he will have to surrender himself back to the jail. “We direct them (Roy and two other jailed directors) to deposit their passport with the court. They shall not leave the country without prior permission of this court,” the bench said. It also asked Roy to keep apprising fortnightly the Tilak Marg police station in New Delhi about movements inside the country. The bench, meanwhile, extended by eight weeks the facilities like telephone and internet to Roy inside the jail. According to a report in The Economic Times, Roy had earlier sought eight weeks more of special facilities or a parole to raise the amount for bank guarantee. However, Sahara counsel Kapil Sibal told the court that his client is unable to submit Rs 5,000 crore bank guarantee as the bank that had agreed to give one backed off after the court set stringent conditions, the report said. Earlier on 14 May, while reserving its order, the court had asked the counsel of Sahara Chief to furnish the “scheme” within two weeks giving details as to how the group proposes to proceed with the sale of its assets and payment to the SEBI. The apex court on 31 August, 2012 had said the group was required to refund Rs 24,000 crore with 15 percent interest in three months to the depositors. Earlier, the court had said that there was a need to resolve the dispute over the total amount which Sahara Group was liable to pay to its investors even if the group complied with the condition of paying Rs 10,000 crore to ensure the release of Roy from jail. The issue of payment of balance amount had arisen as the claim of Sahara refunding the amount has been disputed by SEBI maintaining that there have been contradictions on refund theory by Roy’s group and even the apex court in the past had not agreed to it. The apex court had on 23 March expressed “prima facie satisfaction” and granted three months time to Sahara Group for selling its offshore properties for raising Rs 10,000 crore to ensure the release of Roy. The bench had said in the eventuality of failing in negotiations, its properties would be put to auction by appointing a ‘court receiver’ for alienating its assets. The court had also extended its 1 August, 2014 order allowing Roy to use the conference room in Tihar jail complex to hold negotiations with potential buyers to sell his three luxury hotels - Dream Downtown and The Plaza in New York and Grosvenor House in London - to raise Rs 10,000 crore to get regular bail. With inputs from PTI