Companies & Sectors
Sahara chief Subrata Roy's one year in Tihar jail
Saharashri and two of his lieutenant are still languishing in jail since the Sahara group has so far failed to muster Rs10,000 crore of legitimate funding to get them out on bail. In the meantime, his trolls continue to post foolish comments on every article about Subrata Roy and Sahara group
 
Today, it is one year that Sahara group chief Subrata Roy is languishing in Tihar jail. He brought this upon himself through constant defiance of regulators and the Supreme Court. Nevertheless, clearly, no lessons are learnt.  To have an army of trolls post foolish comments from IP addresses that can be traced to Lucknow, is crass immaturity. We are making no attempt to block them because they are the best examples of why Mr Saharashri is languishing in jail. Will good sense prevail?
 
The Sahara group chief is lodged in Tihar jail since 4 March 2014 for non-refund of over Rs20,000 crore with interest to depositors.  
 
The Sahara group's all efforts to raise Rs10,000 to secure bail for its chief has so far proved futile. In fact, last month, even the apex court expressed concern over how Sahara Group would raise money to secure its chief's release even as the group was seeking extension of facilities inside Tihar jail premises by four to six weeks to enable him negotiate deals with prospective buyers.
 
"You are struggling to pay Rs10,000 crore. How will you pay Rs30,000 crore after coming out," the bench headed by Justice TS Thakur had said.
 
For those who have forgotten, a path-breaking judgement of the Supreme Court, in August 2012, asked two realty companies of the Sahara group to refund Rs24,000 crore collected from investors through an unregulated, debenture-like instrument. But, after paying up just Rs5,120 crore, Sahara resorted to drama and hurled allegations against the regulator through an ill-considered advertisement campaign. It has not been able to prove the existence of even a fraction of the large investor base that it had claimed. The group’s antics angered the apex court; Subrata Roy was held in contempt and sent to jail until the Sahara group deposited Rs10,000 crore, in addition to the money already deposited with the Securities & Exchange Board of India (SEBI).
 
Sahara Group has been trying to raise funds for months to secure release of its chief Subrata Roy, as also that of two other senior officials, from Tihar Jail in New Delhi, where they have been lodged for one year.
 
Yet, after 12 months, the Saharashri, as people from group like to call Roy and the group's two other senior officials are still in jail. 
 
This is strange, given a man like Roy, who reportedly had an endless supply of money to buy marquee properties around the world, sponsor the Indian cricket team for years, gift lavish bungalows to cricketers, claim ownership of several sports teams and stadia and throw lavish parties, cannot muster Rs10,000 crore of legitimate funding to get himself out of jail?
 
Last week, there were reports about Sahara group facing a liquidity crunch for past one year due to embargo and double payment for investor refund, resulting into many problems like meeting employee salary, statutory and other operating obligations. The salary delays are mainly being faced by the staff members in the corporate offices of the crisis-hit group, while there are also delays on certain statutory payments and operating obligations or expenses related to day-to-day business due to difficulty in fund flows.
 
The group has over 10 lakh full-time and part-time employees, including permanent staff at its various companies, permanent agents who get regular incentive payments besides a large number of part-time agents.
 
While the exact number of persons whose salaries and other payments have been delayed could not be ascertained, sources said their numbers could run into "tens of thousands".
 
In a fresh twist to crisis-hit Sahara Group's efforts to raise funds, its iconic London hotel property Grosvenor House, estimated to be worth over Rs5,000 crore, has been put on sale by lenders.
 
Grosvenor House, a landmark property on Park Lane in London, is one of the three marquee hotels owned by Sahara outside India, the other two being Plaza and Dream Downtown in New York.
 
According to a report in the Telegraph daily, Grosvenor House may fetch about 500 million British pounds, more than 470 million British pounds that Sahara Grosvenor House Hospitality Ltd had paid for the hotel in 2010.
 
The report further said that Deloitte was appointed administrators to Sahara last night after "it defaulted on debts tied to the hotel" and they will work with realty consultancy Jones Lang LaSalle (JLL) to find a buyer.
 
Sahara was in talks with US-based Mirach Capital for a syndicate loan arrangement linked to the three properties to replace an existing loan from Bank of China, but the deal fell apart and the two parties warned each other of legal action.
 
Last month, in a new turn of events in the case, the Reserve Bank of India (RBI) had moved the Supreme Court seeking to implead itself as a party in the company's tussle with Securities and Exchange Board of India (SEBI). RBI had sought to stop one of its Sahara group companies from disposing off assets for securing Roy's release.
 
In an application, the central bank had urged the apex court to restrain Sahara India Financial Corporation Ltd (SIFCL) from utilising any of its assets, including securities, for paying dues to SEBI on the ground that SIFCL is residuary non-banking financial company and fell under its (RBI) regulatory control.
 
Prior to this, the Sahara group had informed the Supreme Court that the proposed transactions for a loan of around $1,050 million from abroad for raising Rs10,000 crore to ensure Roy's release from jail had failed.
 
Earlier on 9th January, the Court had allowed Sahara Group to go ahead with its proposed transactions with some conditions. The conditions, included approval of RBI for the transfer of funds raised in the US to India to meet the requirement set for release of Roy.

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Arvind Kejriwal offers to resign as Convener of AAP; Yadav removed from PAC

In a twist and turn of events, Arvind Kejriwal offered his resignation as national convener of AAP, ahead of the Party’s crucial meet. During the meeting, AAP reportedly decided not to have Yogendra Yadav in its Political Affairs Committee

 

Delhi’s chief minister Arvind Kejriwal has offered to resign as the convener of Aam Admi Party (AAP), just hours before a crucial meeting of the party seniors. The national executive of AAP was scheduled to assemble for a crucial meeting to decide on the fate of party members Yogendra Yadav and Prashant Bhushan. Kejriwal’s resignation comes hardly a week after AAP's previous National Executive Council (NEC) meeting, in which Kejriwal had offered to quit, but did not, following overwhelming rejection from the members. According to media reports, Kejriwal has cited being “overburdened” as a reason for his resignation, stating that he is unable to cope with the dual roles as chief minister and convener of AAP. 
 
Meanwhile, according to media reports, the NCE of AAP has decided not to have Yadav in the party's Political Affairs Committee (PAC).
 
This resignation is the latest in the row of troubles and disputes that have plagued the AAP since the past few weeks. It began with party members Yogendra Yadav and Prashant Bhushan raising concerns regarding the operations of the AAP and the autocratic leadership of Kejriwal. Many party members were of the opinion that the two of them were conspiring to usurp Kejriwal's position in AAP. 
 
Following this, a NEC meeting was scheduled for 4 March 2015 in order to discuss the issue, and there were reports that both Yadav and Bhushan would be axed from the Political Affairs Committee (PAC), the party's topmost decision making body. 
 
However, Kejriwal has now submitted his resignation as party chief to AAP National Secretary Pankaj Gupta, and it is reported that he will not be attending the NEC Meeting. 
 
Kejriwal had mentioned that he was “deeply hurt” by the ongoing disputes within the party and that he refused to be dragged into the “ugly battle” in his tweets on Tuesday. 
 
The fate of Kejriwal, as well as Yadav and Bhushan will be determined in the NEC meeting, which will be attended by the top 20 members of the party. It is expected that his resignation, like the one he offered last week, will be rejected. In fact, Yadav himself claims to be against this resignation. “If Arvind has resigned then just like the last time we will oppose it again. Last time also, Prashant (Bhushan) and I had raised our hands and opposed his resignation. It is important for the party that he stays on as national convener,” he said. 
 

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KYC pains for NRIs and PIOs
Banks needs to computerise data of NRIs and PIOs, which will indicate, well in advance when the applicant's overseas passport expires; whether or not he holds any other valid documents, like driving license
 
A few months ago, the Reserve Bank of India (RBI) issued the know your customer (KYC) guidelines,  (DBOD.AML.BC No: 44/14.01.001/2014-15 dated 21 October 2014), which makes it mandatory for banks to periodically update its customer identity data.
 
This particular circular refers only to non-resident Indians (NRIs) and persons of Indian origin (PIOs), who may have also obtained the Overseas Citizen of India Card, after securing foreign nationality, and yet, has very close links back with India. This could be through their investments, or kith and kin living there and their own elderly parents living in India. Such a move to obtain the information and keep a track of such NRIs would be of national advantage, in the long run.
 
The requirement, as per this circular, is proof of one being an NRI or PIO and is given by providing a copy of the valid passport and visa, if holding an Indian passport; for a person of Indian origin, holding, a foreign passport, but holding an OCI card, copy of the same would be needed. However, the rules stipulate that these should be attested by the Indian Embassy or Consulate abroad, or a Notary Public, or any branch of an Indian scheduled commercial bank having an overseas branch in the country of residence of the applicant. To obtain this attestation, it is natural for the applicant to produce the original document for verification!
 
Additional proof of identity and address are also required by supporting documentary evidence. This would be for the NRI or OCI who has "returned" back to India, and is living in the country, on his/ her own, and/or with his/ her family.
 
In addition to the above, customer updation requires the current personal details, such as the address location, phone numbers, mobile phone numbers, email address, passport and visa details (if still holding the NRI status, but with the Indian passport etc.), Pan Card data, with a supporting passport photo.
 
The question is that the above needs must also ensure that the Banks are organised to computerise the data, which will indicate, well in advance when the applicant's overseas passport expires; whether or not he holds any other valid documents, such as the Drivers' license (both domestic and foreign, if any).  Many NRIs, who have residences back in India also have Voter's ID Cards, besides having PAN cards. All these need to be incorporated into the system, and the upgrading must be done at the Bank where the applicant operates. Instead of having to produce tonnes of attested documents, RBI must permit, and the Banks should accept, a self-certified statement if there are any changes, with an undertaking that the revised, renewed document, like the passport, will be provided should be enough, which should be actually given within an agreed time frame.
 
The NRIs/OCIs, in comparison to rest of the Indians at home, are a minority. It will be an enormous and Herculean task if the Banks are expected to obtain this sort of information from every single customer that they may have, for the rest of Indians!  

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

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COMMENTS

vasanti

2 years ago

Valuable insight. Thank you!

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