Please read as business standard news updates 5-10-2013 instead of 7-10-2013
---------- Forwarded message ----------
From: CS A Rengarajan <csarengarajan@gmail.com>
Date: Sat, Oct 5, 2013 at 7:13 AM
Subject: Business standard news updates5-10-2013
To:
SC asks Sahara if it can give ₹ 20k- cr bank guarantee
BS REPORTERS
New Delhi, 4 October
The Supreme Court on Friday asked two Sahara group companies —Sahara
India Real Estate Corp and Sahara Housing Investment Corp — whether
they were prepared to give a bank guarantee for ₹ 20,000 crore. The
firms have been asked to respond by October 28.
In August 2012, the court had directed the firms to deposit the ₹
24,029 crore raised by selling bonds to 29.6 million investors, along
with an interest of 15 per cent, with the market regulator. But so
far, the companies have paid only ₹ 5,120 crore.
The court's observations were made at a hearing of a contempt petition
filed by the Securities and Exchange Board of India ( Sebi). In the
courtroom, the announcement created flutters in the Sahara camp, as a
bank guarantee would entail depositing 100 per cent margin money with
the bank. If the group decides against providing the guarantee,
contempt proceedings would continue.
Though Sahara tried to offer alternatives, Sebi was not keen. It
rejected Sahara's offer to secure the difference in amount through an
immovable property entrusted with a bank trustee.
"Either they have to sell their assets and deposit the money in a bank
account or give a bank guarantee for the entire amount," said Arvind
Datar, Sebi counsel, adding the regulator didn't have the manpower or
machinery to handle the assets, documents or a third party.
Datar added, " I have been dealing with the group for the past four
years. It is not a group playing cricket." He recalled how the group
had not given even a single original document requisitioned by Sebi in
the last several months. " Not a single request has been complied
with. They claim they have assets worth ₹ 60,000 crore now. The dues
are only a third." Sahara's offer for a bank trusteeship deal came
when the court pinned the group by hinting irrespective of contempt,
the group officials could be detained till the order was executed.
Judge J S Khehar referred to a 1960s judgment in which " the detention
could continue till the execution of order".
Khehar's bombshell came after Ariamma Sundaram, the counsel arguing on
behalf of Sahara chief Subrata Roy, said Roy wasn't liable for
contempt, citing legal provisions and rules. " We will find a way
out," Khehar said.
The judges expressed displeasure with the way the group had been
dragging the matter for years.
Turn to Page 12 >
Judges hearing Sebi's contempt petition have expressed displeasure
with the way the group had been dragging the matter for years
Click: Article continued from…SC asks Sahara if it can give
________________________________
SC asks Sahara...
Judge K S Radhakrishnan said: " Umpteen opportunities have been given.
After going through the facts fully, we have fixed the time. The
lawyers who were there when the main matter was argued are not here.
Even the amount was fixed based on your affidavit, nothing beyond the
affidavit." Sundaram tried to explain the group had already repaid
most of the money directly to bondholders, and it wasn't the court's
intention the investor be paid twice. He argued the court was putting
the cart ahead of the horse by asking the companies to pay the entire
sum.
Khehar explained the effect of the original order in three simple
steps. " One, pay back the whole amount to Sebi. Two, give all the
documents. Three, let Sebi decide what should go to investors, what
should go back to you and what should go to the government. So, the
horse has always been ahead of the cart." During the course of the
hearing, the judges indicated they weren't interested in punishing
anyone; their prime objective was to ensure the order passed by the
court was implemented. " The court indicated the Saharas should
attempt to purge the contempt and enquired as to what Saharas could
offer in this regard. It was indicated by Sundaram that Saharas could
provide immovable assets as security, which could be held by a
nationalised bank in trust. He also stated the said lands could be
sold by the bank if any deficit arose and monies shall be paid to Sebi
according to the directions of the court," the Sahara group said in a
statement.
--
CS A Rengarajan
9381011200
CS Benevolent Fund is a collective effort towards extending the much
needed financial support to the community of Company Secretaries in
times of distress Let us lend support and join for noble cause.
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--
CS A Rengarajan
9381011200
CS Benevolent Fund is a collective effort towards extending the much
needed financial support to the community of Company Secretaries in
times of distress Let us lend support and join for noble cause.
SHARING KNOWLEDGE SKY IS THE LIMIT
This mail and its attachments (if any) are confidential information
intended for persons to whom the email is planned for delivery by the
sender. If you have received this mail in error please notify the
sender of the error by forwarding the email and its attachments (if
any) and then deleting the mail received in error and the relevant
email trail in this connection without making any copies or taking any
prints.
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