The nationwide bust up over
how a certain liquor baron made bankers kiss dirt, walking away with bagful of
cash through a VIP channel, possibly to an undisclosed city in Europe, is
making headlines and triggering breaking news almost every day now.
But
questions need to be raised about the curious case of billionaire Subrata
Roy who paid loads of cash to the market regulator and last week completed
two years behind bars in Delhi's maximum security prison.
Roy,
who recently wrote a tome on his life experiences, is now called a
philosophical author by many .
Jokes
apart, someone seriously needs to scrutinise the case again, especially at the
way the Securities and Exchange Board of India (SEBI) handled it and the
way Sahara group demonstrated considerable resilience. A few days ago, a
handful of Sahara employees protested the delay in payment of salaries; they
were in their undergarments. The idea was to be visible on
television.
But
what's happening in the case?
On 31
August, 2012, the apex court had asked SEBI to return money to Sahara's
investors. In the last 40 months, it has been able to pay Rs 50 crores. The
Mumbai-based market regulator advertised four times in as many as 144
newspapers, inviting demands for repayment. Worse, the fourth advertisement said
it was the last opportunity for raising demand for repayment.
Does
that mean that - under any circumstances - SEBI won't be able to pay over
Rs 100 crores? And what has it got in its kitty? It has received a whopping Rs
12,000 crores and even earned interests on FDs. Also, SEBI has the property
papers of Sahara's land bank worth Rs 40,000 crore in its custody. There are
chances it will have another Rs 5,800 crore ( Rs 800 crore cash and Rs 5,000
crore bank guarantee) by the time Roy and his two directors walk out of the
prison gates. Sahara, which sought time for raising the stipulated cash from
its assets for SEBI, was given a 45-day extension that ended in November 2015.
The group claimed it had five "solid offers" for its properties.
The
slugfest between the market regulator and Sahara has been described as
corporate India's best known samudra manthan.
SEBI disputes Sahara's claim that it has paid 95 per cent of its investors from
whom it had collected Rs 24,000 crores through optionally fully convertible
debentures (OFCD) in 2009-10, after the written permission from 2 Registrars of
Companies. The Supreme Court however, upheld SEBI's plea and directed that
Saharas' investors have to be refunded the money along with interest through
SEBI.
The
billion dollar question that needs to be raised is when will SEBI verify the
authenticity of these investors? If four advertisements have failed, doesn't it
become obligatory for SEBI to verify Sahara's repayment claim? After all, the
Supreme Court says the the final decision on the issue of unpaid investors lies
with SEBI. The market regulator, which said in January 2013 that it wanted to
hire a verification agency, has reportedly failed to organise one. So who will
help ascertain the genuineness of bondholders in the Sahara case.
Look
at the way the events have progressed. SEBI has not given any reason for
withholding its notice inviting the tenders. The first tender to seek a
verification agency was floated on 2 November, 2012. SEBI asking for
applications by 22 November, 2012. It did not happen and so the deadline was
extended to 21 December, 2012, and again extended till 15 January, 2013. After
the expiry of this last deadline, SEBI decided to withhold the tender notice.
It is
now March 2016. Someone must ask questions, either in court or
on televised debates. Otherwise, the billionaire, will have no option but
to write the second sequel of his planned trilogy.
