SEBI : SAHARA ISSUE MISCHIEVIOUS STATEMENT BY SEBI LAWYER Mr.DATTAR

We object to misleading statements made by Sebi lawyer, Mr. Arvind Dattar in public and media. His statement in media tends to mislead by creating an impression as if 'Saharasri' Subrata Roy Sahara wanted to go abroad before incarceration.  The fact however is that, 'Saharasri' was abroad and immediately returned to the country on being summoned. In November, 2013, the Hon’ble Supreme Court had restrained ‘Saharasri’ and other directors from leaving the country without permission. It is very important to state that subsequently Saharasri was granted permission by Hon’ble Supreme Court to travel abroad for two weeks, yet he did not go abroad. It is therefore clear that the statement given by SEBI’s senior lawyer Mr. Dattar is absolutely incorrect.

In 2012 Sahara has repaid to 95% of its Investors.  Nobody believed that.

But now Sebi in their 4th all India Advertisement through around 144 publications has clearly said that this is the last chance esteemed Investors to lodge their claims with SEBI seeking refund.

For last 43 Months uptil, now demand of repayment to public is only Rs.52.80 crores whereas Sebi already has Sahara's around Rs.13700 crores (with interest earned) available with them and till now Sebi has refunded to public only Rs.51.84 crores. Above all we have to pay Rs.5300 crores (including B.G. of Rs.5000 crores) more to get the bail of chairman and two directors. Also Sebi is holding land asset worth around Rs.40000 crores.

So Sahara is giving security of Rs.59000 crores for only around 104 crores repayment to public to be done by Sebi ever. Sebi do not agree worth of land asset as Rs.40000 crores, They say it is Rs.20000 crores. Even then it is 39000 crores security against Rs.104 crores requirement for repayment to public.

The fact also remains, that Sahara did everything as per law prevailing at that time. Sahara did this OFCD business with written permission of 3 Registrar of Companies under Ministry of Corporate Affairs. For continuously 7-8 years registrar of companies took our balance sheets etc, received the submission of prospectus, did dozens of inspections and investigations, we filed our return every year with registrar of companies etc.

Then why the case is against Sahara by Sebi. Sebi should lodge case against 3 registrar of companies, Ministry of Corporate affairs.




Advocate On Record Gautam Awasthi
Supreme Court

BAIL CASH ‘ARRANGED’, SUBRATA ROY READY FOR FAREWELL TIHAR

Buzz in Delhi says the Sahara boss, who is organising a series of entertainment shows for the prison staff and inmates, could be a free man before the summer holidays.

They are calling it Farewell Tihar. Encouraged by reports that the Rs 10,000 crore needed for bail has been finally organized, Sahara boss Subrata Roy is getting ready to leave Delhi's maximum-security prison. The capital is abuzz with news that the cash has finally been organized by the Lucknow-based conglomerate and that Roy could end his 14-month hiatus - a record for a corporate captain of his stature - around the time the courts close for summer holidays. 

Roy was imprisoned after he failed to appear for multiple court hearings in his firm's legal battle with the Securities and Exchange Board of India (SEBI). The funds raised are to help repay lakhs of small-town investors who trusted Sahara's "chit funds" with their savings. Roy must pay Rs 5,000 crore in cash and Rs 5,000 crore in bank guarantees to the Supreme Court. His company has paid Rs 3,117 crore to date. 

"We have been trying hard to raise funds to secure his release," said a Sahara India spokesperson. "We are pledging whatever we can at this point in time to ensure his exit from Tihar. We are confident we will be able to raise the money to secure his release before the summer holidays." 

It is reliably learnt that to secure Roy's release, Sahara is pledging whatever real estate the group has. 

Highly placed sources in Tihar claim the 14-month incarceration has left Roy - who called himself managing worker, once wore cash on his shirt and fancied parties with floral rains from a helicopter - a transformed man. On March 4, Roy, 67, marked a star sign on his prison wall to indicate a year in jail. 

The Sahara chief, who has kept himself fit by playing badminton regularly, has been keeping track of his business, indicating to his staffers that once out his immediate focus would be on media outlets like its television channels and newspaper. Late last month, he called a meeting of regional media heads and asked why their channels were not among the top three news channels. Cash and staff morale were problems, he was told. It is reliably learnt that Roy has given 25 days to his managers to come back to him with a game plan for the channels. 

Roy has continued his motivation letters from the prison to his employees, two of whom have already committed suicide. "I am coming out soon, have faith in me, the company. Work hard, please do not get worried about salary delays," he wrote. "I do not have a magic wand in my hand. We are going through a crisis... But we will grow, faster than before." 

Meanwhile, Roy has other plans - among them a grandiose farewell to the jail staff and prisoners in the form of a series of entertainment shows. The first one was held last year when singers Sapna Mukherjee (of Tridev fame) and Sonu Nigam performed for three hours before a packed audience. Bollywood star Salman Khan, who has tried unsuccessfully to meet Roy, has also agreed to perform at Tihar. And last month, the jail authorities - encouraged by Roy - have started a Sunday morning series involving top classical musicians. Two weeks ago, Grammy nominee flutist Ronu Mazumdar performed in Tihar. "Many lined up for classes with me," the musician said. 

Next on the list is a sitar-cello duet by Subhendra Rao and Saskiya Rao. "We want to bring positivity in the lives of the inmates," said Alok Kumar Verma, director general (prison). 

Dipayan Mazumdar, head of Legends of India, the Delhi-based cultural group organizing the shows with Tihar, is optimistic of roping in Roy - even after he leaves the prison - to continue the shows throughout the year. "It will be a big help," said Mazumdar. 

Roy has also been meeting prisoners during the daily "free time". He has advised many to start their own business because of India's troubled job market, recounting days when he drove a Lambretta scooter across Lucknow to promote his company. The book he wishes to write is almost ready, Roy has been writing for one or two hours every day. He wants to write on prison reforms and, of course, on those who "forgot him", including friends from the corporate world and Bollywood stars. 

"You know who are your friends when you are in bad times," Roy wrote in his last motivational letter to employees. In the jail he has, however, remained silent when asked about his "betrayers".

Statement from Sahara Counsels Ayush Chaudhary & Abhinav Mani Tripathi

We are thankful to the Hon’ble Court for giving us permission to raise funds via mortgage and sale of certain properties. Looking at the magnitude of the transactions involved, the Hon’ble Court has allowed us 90 days time to work from the conference room within Tihar Jail court premises, extending the facilities of video conferencing and meeting with various parties.

Apart from the mortgage of the three foreign properties, court has also allowed sale of ten domestic properties and a land parcel of Aamby Valley City. We are in a very advanced stage with many parties and shall execute these deals at the earliest. We have already deposited nearly Rs. 4,000/- crores in the ‘Sahara-SEBI Account’ and we shall be very shortly depositing the remaining amount along with the Bank Guarantee.

Sahara Counsel

Ayush Chaudhary & Abhinav Mani Tripathi

Sahara’s Rs. 12,000 Crores are already with SEBI

Sahara says that report of Due amount of Rs 40,000 Cr is incorrect, since such amount or such observation was never made during the course of hearing either by the Counsel appearing for SEBI or by the Hon’ble Court or any other Counsel. The figure of Rs. 40000 Cr. is imaginary and same amounts to irresponsible reporting of Court proceedings. There is no pleading or any document in the Court record which mentioned the figure of Rs. 40000 Cr. The order dictated in the open Court on 13.03.2015 also does not bear this figure and therefore, these amounts to incorrect reporting of Court proceedings which further dented the image of Mr. Roy and two directors in the public eye.

2.      In fact, the Court very fairly stated that amount payable was subject to verification and after verification all excess amount would be refunded Back to Sahara.

3.      There is no observation pertaining to the reporting of one month to save group by the Hon’ble Court, same is misconceived.

As a matter of fact, the Hon’ble Court observed during the proceeding to Mr. Kapil Sibal, Senior Advocate that the outhouse facility along with secretarial staff etc. can be extended even up to “two months” provided a concrete proposal is put forward as far as the satisfaction of the bail bond of rest of the amount of about 6000 Cr. is concerned. Please note that Sahara's two companies are asked to provide proposal for complying with the remaining amount out of bail amount of Rs. 5,000 Cr cash (out of which Rs. 4,000 Cr. cash has already been paid to SEBI) and Rs. 5,000 Cr. as bank guarantee and not for any imagery figure of Rs. 40,000 Cr.  The period of 2 month was observed by the Hon’ble Court when Mr. Sibal requested for 8 weeks outhouse facility to finalize the transaction to satisfy the bail bond amount of Rs. 10,000 Cr. as ordered by the Hon’ble Court on 26.03.2014.

Therefore, the figure of 4 weeks as reported in the article is incorrect since Mr. Sibal sought 8 weeks’ time and not 4 weeks. Same is clarified to that extent.

4.      The news represented that an ultimatum was given whereas the order passed by the Hon’ble Court makes it clear that the Hon’ble Court accepted the request of not appointing a Receiver since Mr. Sibal stated that a serious attempt has been made for finalizing a deal of which the documents will be provided to the Amicus Curiae and the Counsel for SEBI. This acceptance of the request was also noted in the order dated 13.03.2015. As a matter of fact, Mr. Sibal stated that the situation of appointment of a Receiver may not arise if an opportunity is given. There is nothing mentioned in the order passed on 13.03.2015 about any ultimatum and therefore same amounts to incorrect reporting and same is clarified to that extent.

5.      The Hon’ble Court extended the facility of communication up to 5 hours a day to Mr. Roy and two directors of Sahara’s two companies, inside the jail premises which was not reported in the article. Further, jail authorities were also directed to facilitate Mr. Roy and two directors with two laptops for functioning which was also not reported in the article.

6.      During the hearing, SEBI was directed to file an affidavit clarifying its stand when a letter was indicated to the Hon’ble Court by Mr. Sibal that a communication was issued to HDFC Bank by SEBI on 19.12.2013 that the order dated 21.11.2013 only applies to specific movable and immovable properties in a particular application, therefore, RBI has no cause of action to state that there was a violation by Sahara India Financial Corporation Limited of the order passed by the Hon’ble Supreme Court on 21.11.2013 and 04.06.2014.

7.      Further, Mr. Sibal fairly stated during hearing that about Rs. 12,000 Cr. stands deposited with SEBI as on date out of which barely anything was disbursed by SEBI. The Hon’ble Court also made it clear that it will be open to argue on that issue at a later stage. However, the article in the front page of the newspaper reported that only Rs. 5,120 Cr. was deposited whereas nearly Rs. 12,000 Cr. stands deposited with SEBI as on date. Same is clarified to that extent.

Sebi makes fresh bid to find Sahara Investors

Sebi had received 4,900 refund claims during the August-September exercise from the bondholders of two Sahara companies --Sahara India Real Estate Corp Ltd (SIRECL) and

Sahara HousingInvestment Corp Ltd (SHICL), which had raised over Rs 24,000crore from about three crore investors.

While Sahara maintains it has already repaid more than 93per cent of the outstanding dues directly to the concerned bondholders and the remaining amount was just about Rs 2,500 crore, it deposited Rs 5,120 crore to Sebi in December 2012towards the investor refunds as per Supreme Court orders. Further money has been deposited by the group with Sebi subsequently and it is currently in the process of raisingmore funds to ensure release of its chief Subrata Roy from the jail.

Sebi began the refund process in May 2013, while asking eligible investors to submit their claims. However, the refunds made so far remain minuscule, although the regulator

has not so far made public the quantum of all such payments. Sahara has been maintaining that Sebi should verify the refunds made by it directly and claims to have submitted to

the regulator proof for nearly 75 per cent of refunds. It also says that the remaining 25 per cent refund proof is lying in its Mumbai godown to be given to Sebi.

Sahara also contends that bulk of its investors didn't have bank accounts and other formal financial papers, the details of which have been sought by Sebi. On the identification on Sahara's investors, Sebi has contested in the court that addresses of many investors given

by Saharas were incomplete as only village name, district and state is given without any house number or street/lane names.

On its part, Sahara has maintained that most investors are from rural India and had no house numbers or street names. In the new refund application form, Sebi had given a new

address format for rural investors, asking only village name, post office, district and state as against additional details like house number and street name for urban addresses.

In its latest annual report for the year ended March 31, 2014, Sebi had disclosed having received 3,612 refund applications involving 13,948 deposit accounts till that time in the Sahara matter.

Of those applications, Sebi made refunds in case of 445 applications involving an equal number of deposit accounts for an aggregate amount of about Rs 1.25 crore including interest

of about Rs 43.83 lakh. The other applications had deficiencies or fell under either 'mismatch' or 'multiple investment' category. "Out of the remaining 3,167 applications, in respect of

424 applications involving 1,683 deposit accounts, certain deficiencies were observed in the applications/supporting documents submitted by the applicants which were brought to

the notices of the applicants for their clarification/rectification, and replies are awaited from

them," Sebi said. Sebi also could not process 1,260 applications involving 7,159 deposit accounts as these were in multiple investment category, while 92 cases involving 92 accounts did not meet

the extant refund methodology adopted by the regulator. Besides, 1,776 applications involving 4,395 accounts could not be processed because of being 'mismatch category'.