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Mumbai Economic Offences Wing launches probe against Sahara

The Mumbai Economic Offences Wing probe will focus on whether Sahara is intimidating investors.

Shawan Sen | CNN-IBN

Updated:April 10, 2013, 12:26 PM IST
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Mumbai Economic Offences Wing launches probe against Sahara
The Mumbai Economic Offences Wing probe will focus on whether Sahara is intimidating investors.

Mumbai: The Mumbai Economic Offences Wing has launched a preliminary investigation against the Sahara Group. The probe will focus on whether Sahara is intimidating investors.

The Mumbai EOW chief has told CNN-IBN that they have been asked by the Government of India to probe Sahara. This comes even as Sahara group chief Subrata Roy has to appear before market regulator Sebi on Wednesday in the high-profile refund case involving an estimated Rs 24,000 crore payment to over three crore investors. If he fails to appear, Sebi has said it will issue orders for the attachment and sale of assets of the Sahara Group.

Sebi had summoned Roy and three other directors of two Sahara firms for personal appearance in an order dated March 26. Sebi wants to ascertain details of their personal assets, as also the investments and assets of the companies, to move ahead with sale of immovable assets for realisation of money to be refunded to the investors.

In the same order, the two Sahara firms and their four top executives were also asked to provide details of their assets and investments to the market regulator by April 8. It could not be ascertained whether these details have been furnished before Sebi as per the orders. Roy and others (Ashok Roy Choudhary, Ravi Shankar Dubey and Vandana Bhargava) have been ordered to appear before Sebi's whole-time member Prashant Saran. If these persons fail to appear before Sebi as ordered, the regulator has said it would ex parte settle the terms of proclamation of sale of their and the companies' assets.

The group on various occasions, including through newspaper advertisements, has accused Sebi and its top officials of not providing an opportunity to meet Sahara chief Subrata Roy and others for presenting their points of view. Incidentally, the Securities Appellate Tribunal (SAT) is scheduled to hear later this week, on April 13, the appeals filed by Subrata Roy and others against a previous Sebi order for attachment of their bank accounts, assets and investments. These properties include those related to the group's Aambey Valley resort town near Pune, other real estate assets in Delhi, Mumbai and at other places across the country, shares, mutual funds and various other investments.

During their personal appearance, Roy and other three top executives have also been asked to produce original title deeds of all assets and investments of the two firms, Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL). Besides, they have been asked to furnish details of their bank accounts (in India and abroad), and the complete books of accounts along with income tax returns and wealth tax returns filed by the two companies from fiscal 2007-08 onwards. Later this month, the Supreme Court would also hear a plea by Sebi seeking orders for Roy's arrest and barring him from leaving the country.

The two Sahara firms, SIRECL and SHCIL, have been asked by the Supreme Court to refund over Rs 24,000 crore to their bondholders within three months. In this apex court order dated August 31, 2012, Sebi was asked to facilitate the refund after verifying genuineness of the investors. Later on December 5, 2012, the court gave additional time to Saharas and asked it to make an immediate payment of Rs 5,120 crore, followed by Rs 10,000 crore by first week of January and the remainder by first week of February.

After the group failed to make the payments as per the orders, Sebi ordered freezing of accounts and attachment of assets. Sahara claims that it has already repaid most of the investors directly and its total outstanding refund liability was less than Rs 5,120 crore, which it has given to Sebi. Sebi had passed the attachment orders within days of the Supreme Court saying that the market regulator was free to freeze accounts and attach properties if Sahara group firms were not depositing the money with it for refund to investors.

In two separate attachment orders against SHICL and SIRECL, together running into 160 pages, Sebi had said that the two firms had raised Rs 6,380 crore and Rs 19,400 crore respectively from bondholders and "various illegalities" were committed in raising of these funds. In these orders, dated February 13, 2013, Sebi had also asked the two firms and their four top executives to provide details of their movable and immovable properties, investments, among others, within 21 days. However, Sebi last month said that these orders were not complied with and therefore it had to pass another order to move ahead with sale of assets for realisation of funds required to be returned to the investors.

(With additional information from PTI)

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