Sahara India’s Subrata Roy Issued Bailable Warrant by SEBI Special Court over Non-appearance in Cheating Case of Rs25,000 Crore
Moneylife Digital Team 14 September 2022
A Securities and Exchange Board of India (SEBI) special court has issued a bailable warrant against businessman and Sahara India Parivar founder Subrata Roy for not appearing before the court in connection with a cheating case worth more than Rs25,000 crore. Special judge VS Gaike was hearing a 2014 case by SEBI against Sahara Housing Investment Corporation Ltd. (SHICL), Sahara India Real Estate Corporation Ltd (SIRECL) and others in which Mr Roy, an accused, was supposed to appear before the court. However, Mr Roy's counsel filed an application for exemption on the ground of his medical condition post-COVID-19 infection. It was stated that he suffered from type-2 diabetes as well as hypertension and a medical certificate issued by Sahara Hospital, Lucknow was submitted to the court by his counsel.
 SEBI's counsel opposed the application stating that Subrata Roy had undertaken to remain present in court after disposal of his discharge application and that post-effects of COVID-19 last only for three to four days. The court noted that in 2017 the Bombay High Court had directed Mr Roy to remain present before the trial court on all dates post the disposal of his discharge application in the case. Thereafter, it noted that as per the roznama, Roy — in defiance of the High Court's directions—had not appeared after 2019 and, therefore, rejected his application for exemption. 
On oral request of counsel for SEBI, the court also issued a bailable warrant of Rs25,000 crore against Mr Roy. However, the order was kept in abeyance for a week as Roy's lawyers wished to challenge it before the High Court. According to the allegations made against both the companies, a special resolution was passed to raise funds through the issuance of unsecured Optionally Fully Convertible Debentures (OFCDs) through a private placement of friends, associates, group companies, workers, and others affiliated in any way with the Sahara group of companies. 
The red herring prospectus claimed that the company had no plans to list the OFCDs on any recognised stock market. As per SEBI’s calculations, SIRECL received around Rs6,380 crore from over 75 lakh investors between 2009 and 2011. SHICL, on the other hand, received around Rs19,400 crore from nearly two crore investors between 2008 and 2011. The business allegedly launched a public offering disguised as a private placement using OFCDs. SEBI claimed that it received several complaints concerning the company's failure to disclose its red herring prospectus.
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