Supreme Court ordered the arrest of Sahara Chief Subrata Roy

Supreme Court ordered the arrest of the Sahara chief Subrata Roy

Created On: Feb 27, 2014 19:03 ISTModified On: Feb 27, 2014 19:04 IST

The Supreme Court ordered the arrest of the Sahara chief Subrata Roy on 26 February 2014. The court ordered his arrest following his failure to appear before it in a case arising out of non refund of 24000 crore rupees to investors by two of his companies.

The Court rejecting Roy's plea to exempt him from personal appearance on the ground of ill-health of his 92-year-old mother ordered to issue non-bailable warrants.

Roy is also facing contempt of court along with the three other directors for failure of two Sahara firms to comply with the court's order of 31 August 2012 asking Sahara to refund 24000 crore Rupees irregularly collected from nearly 3 crore investors.

However, Sahara claimed that it has refunded the entire amount to investors except 2000 crore Rupees and had deposited 5120 crore Rupees with market regulator SEBI. But the Sahara firms have been falling short of the SC's scrutiny of the mode and proof of refunds.

Sahara-SEBI dispute

• Whether SEBI or Union Ministry of Corporate Affairs has jurisdiction over fund raising through bonds by two unlisted Sahara entities
• Whether or not raising funds from  more than 50 people, even through private placement, qualifies as public offering.
• In 2008, two Sahara Group firms sought nod from two Registrar of Comapnies (RoCs) to raise funds through optionally fully convertible debentures (OFCDs), via private placements. Raised funds from 3 crore investors.
• In 2009, Sahara Prime City approached SEBI to go public. SEBI asked Sahara Group firms to refund money raised through OFCDs.
• In April 2010, SEBI forwarded investors complaint to ROC.
• Case heard by Supreme Court and ordered Sahara Group to refund 24000 crore Rupees including interest.

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