Unlike its earlier order that imposed severe time restrictions on Sahara, the apex court today gave the Subrata Roy-led Sahara Group time till February to repay Rs24,000 crore it had raised from investors through bond sales plus an interest of 15% on the amount. This order is quite different in spirit from the earlier order
Giving more time to the Sahara Group, the Supreme Court on Wednesday asked Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corporation (SHICL) to refund Rs24,000 crore of investor's money by February next year.
A bench headed by Chief Justice Altamas Kabir asked Sahara India Real Estate Corp and Sahara Housing Investment Corp to deposit first demand draft of Rs5,120 crore immediately with market regulator Securities and Exchange Board of India (SEBI) and the balance in two instalments.
The apex court told the Sahara Group to pay first instalment of Rs10,000 crore by first week of January and remaining by first week of February. The amount will have to be paid by the Sahara Group with 15% interest as per the 31st August directive, the Supreme Court said.
Yesterday, the Sahara Group was given one more day by the apex court to spell out when it would return Rs27,000 crore invested by people in its group companies.
Chief Justice Kabir had come down heavily on the companies for not implementing the apex court's order and said they are not entitled to a hearing, but finally agreed to hear Sahara's plea saying he is more concerned about investors’ money.
On Monday, the apex court rapped the Sahara Group for not refunding Rs27,000 crore to investors, saying its every step was “very shaky” and questioned its ‘unjustifiable’ conduct against the interest of the common investors.
Last week, the Sahara Group, through newspaper ads claimed that from 1978 to 30 September 2012, it received/raised Rs2.25 lakh crore from the public. The company claimed that so far it repaid Rs1.7 lakh crore to its 14.7 crore investors and as on September end has a net outstanding liability of Rs54,364 crore.
Market regulator SEBI had insisted that strong action be taken against the Group's companies and said that it has also filed a contempt petition against them.
The court was hearing the Sahara Group's plea against the order of Securities Appellate Tribunal (SAT) which had dismissed its petition against market regulator SEBI in a case involving refund of about Rs24,000 crore with interest to about three crore investors.
In their appeal before the SAT, two Sahara Group companies had sought the Tribunal's intervention in refund of investors' money and had accused the market regulator SEBI of wrongly charging them of non-compliance with a Supreme Court order in that regard.
The Tribunal, however, had said that any further direction in the case could be sought and granted by the Supreme Court alone and dismissed the appeal.
The apex court had asked SIRECL and SHICL to refund an estimated Rs27,000 crore with an annual interest of 15%.
Earlier, the court had asked the companies to furnish the documents related to these investors to SEBI within 10 days and refund the money within three months, failing which the regulator was asked to freeze the accounts and attach properties of the two companies.
In a statement sent through PR Agency- BNK24x7, Satish Kishanchandani, Counsel for Sahara stated, "Sahara had offered to pay the amount payable to the outstanding OFCDs holders. Sahara had kept two Pay Orders ready. As per the certificate of the statutory auditor, the outstanding liability of both the companies towards the outstanding OFCDs is Rs2620 crore only as on 30 November 2012. On 30th November, Sahara offered pay orders of Rs2,620 crore and also a buffer amount of Rs2,500 crore subject to certain verification of some pending/continuing at company's end."
"However, the Supreme Court directed that Sahara should pay Rs17,400 crore along with interest as stated in the Order. Today, Sahara was ready to offer Bank Guarantee of Rs14,780 crore so that this amount plus Rs2,620 crore would become Rs17,400 crore. Pay Orders for about Rs5,120 crore should be paid to SEBI and the remaining amount be paid in two instalments Rs10,000 crore in the first week of January 2013 and the remaining amount in the first week of February 2013. As Sahara has already redeemed OFCDs, SEBI is required to return the excess amount if any, to Sahara after payments to the outstanding OFCD holders. Till the time the said amounts are repaid to Sahara as aforesaid to that extent there would be double payment," the release said.
Read how the country’s most loved milkman was made chairman of the National Dairy Development Board, after Lal Bahadur Shastri was amazed about the way Dr Kurien succeeded in transforming the Kheda milk co-operative venture into a profitable social enterprise
In the mid-eighties, I lived at the Ashoka Hotel till the government finally found a home for me on Mathura Road. Dr Verghese Kurien too lived in the suite next to mine. Soon, we became friends and often had our sundowners together followed by light dinner from the Ashoka kitchen.
Both of us were fish out of water in bureaucratic Delhi and were unhappy with its serious systemic inadequacies. So quite often, the subject veered towards finding ways to deal with the babus. One day, I bragged a little about my working for the government for a token salary of Re1. Kurien was quick to say, “You still are a babu, Deodhar! But I am not”. Then he went on to share a very exciting story that explained why he wasn’t a babu in spite being the chairman of the National Dairy Development Board (NDDB). He was a great story teller, and the way he narrated the story was so exciting that the very next evening, I asked a Doordarshan producer to come to the Ashoka and made Kurien narrate it all over again to the people of India. I also arranged for its telecast the following week. Today, that film is unfortunately unsalvageable; otherwise I would have uploaded it on YouTube!
The whole episode is unique, since it not only shows how diplomatic our Milkman was, but also reveals what a great prime minister our country had in Lal Bahadur Shastri.
It was the October of 1964. Amul dairy had just installed its first milk processing plant. Dr Jivraj Mehta, the then chief minister of Gujarat suggested that they invite prime minister Shastri to inaugurate the plant. The singular hurdle was the proximity of Anand to the Pakistan border, since the dark clouds of a potential war with that country were looming large. A brief morning visit by the prime minister to inaugurate the plant, then immediately return to Delhi, was the only option left. All appeared to be well set, till Kurien received a return message from the PMO. Shastriji, the message said, desired to visit Anand on the previous day, and spend the entire time with the Kheda district farmers in their villages. Then came the climax. The message further said that the PM would like to spend the night in one of the farmers’ houses. The next day, he would inaugurate the conference and fly back to Delhi.
This posed a big security challenge. Dr Mehta told his home minister and Kurien that the visit should be kept a top secret. He left the security part to be handled by the state home secretary and Kurien. With a smile, Dr Jivraj Mehta added that the plan should be such a secret that even he should not be told! Shastriji’s visit was to be kept a secret till he began touring the district. Wherever he appeared, villagers were surprised, but overjoyed to see their farmer prime minister in their midst. Kurien’s biggest challenge, he said, was to find a farmer with whom Shastriji could spend the night, especially due to strict secrecy of the visit. He identified one house, but told the farmer that a foreigner desires to spend the night in his home. The farmer grumbled, but finally gave in. One can imagine his shocked surprise when at night, instead of a foreigner, the PM of the country showed up at his door!
Next day, after the function, Shastriji told Kurien that he wished to talk to him before he left. Once in the privacy of his chamber, Shastriji expressed his surprise about what he had witnessed the previous night. He said, “I am wondering about your success in Anand. I met hundreds of your farmers and visited their homes. They are as dehati as our UP farmers, your cows and buffaloes are small and do not yield even half the quantity of milk we get from our animals in UP or Bihar. But still, you are doing so well and doing it profitably. How did you do it Kurienji?”
Kurien said, “Sir, Kheda farmer’s milk co-operative has employed me to assist them in making the project a success, so that they see better days, get a better price for their products and prevent waste. As a professional manager, my job is not to just deliver what they want, but also bring in techniques and technology that help us to be efficient in what we do. We are still making efforts to improve our performance.”
Shastriji said, “But in our milk co-operatives too, we have put competent and experienced officers from the IAS. In spite of this, nowhere do we see similar success. In what way are you different?”
Kurien was frank in saying, “Sir, in Kheda, I am the employee of the farmers. If I fail, they can fire me. In other cases, the farmers are the subjects of the government official controlling their society.” Shastriji smiled in agreement and added, “Mr Kurien, you have to help me to do what you are doing nationwide. I want you to be the chairman of the newly formed National Dairy Development Board”.
Kurien said, “Sir, it will be my honour, but I have two conditions. First, I will not ‘join’ NDDB and will continue to remain an employee of Kheda Milk Co-operative. Secondly, I would not like to move to Delhi and therefore, NDDB headquarters would have to be in Anand.”
This is how Kurien avoided becoming a babu, and still enjoyed the rights to rule over NDDB, much to the dislike of the IAS lobby in the ministry. This clever Mallu was better than this Pune Chitpawan.
To support Moneylife’s initiative of Bharat Ratna for V Kurien, please click here and sign the online petition.
(PS Deodhar is founder and former chairman of the Aplab Group of companies. He is also the former chairman of the Electronics Commission of the Government of India and was an advisor to late Prime Minister Rajiv Gandhi on electronics. He also was the chairman of the Broadcast Council in 1992-93 that set in motion the privatisation of the electronic media with metro channels.)
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