In a setback for Sahara chief Subrata Roy, the special judge of the Securities and Exchange Board of India (SEBI) had issued a bailable warrant against him while rejecting his application seeking exemption from appearance before the court on grounds of medical conditions.
Special judge VS Gaike had issued the bailable warrant of Rs 25,000 on September 6. However, on request from Roy’s advocates, Harshand Ponda and Ashok Sarogi, the court kept the warrant at abeyance for a week – till September 13, to allow them to challenge before a higher court.
Saraogi said that they will approach the special judge on Wednesday seeking further relief. “The special court was not available on Tuesday (September 13), hence we will seek further relief on Wednesday,” said Saraogi.
The special court had issued the warrant while hearing a case filed by the SEBI against Sahara Housing Investment Corporation Ltd. (SHICL), Sahara India Real Estate Ltd. (SIRECL), and others registered in 2014.
Roy, who is one of the accused in both cases, was supposed to appear before the court. However, his advocates filed an application seeking exemption “on the ground of his medical condition after the Covid-19 infection”. Stating that Roy’s “Type 2 diabetes and hypertension are well known”, they submitted a medical certificate issued by Lucknow’s Sahara Hospital.
Special public prosecutors Ayush Pasbola and Omprakash Jha, appearing for the SEBI, opposed Roy’s exemption application saying that the Sahara Chief had given an undertaking that he would “remain present in the court after the disposal of the discharge application”. Further they contended that post-effects of Covid usually last only for three to four days.
Special judge Gaike took note of the Bombay High Court order which said that “upon discharge applications being disposed off, the applicants (Roy) shall personally remain present before the Trial Court on the scheduled date.” This shows that the applicant had given an undertaking before the high court to remain present on the scheduled dates in the trial court, said the court.
Taking note of the roznama (register of the daily proceedings), judge Gaike said that Roy had last appeared before the court in 2019 and after that did not appear in court.
“Therefore, considering the fact that he is not complying with the directions of the high court, I am not inclined to allow the present application,” added the judge.
SEBI has alleged that both the companies passed a resolution to raise funds through the issue of unsecured Optionally Fully Convertible Debentures (OFCDs) by way of a private placement of friends, associates, group companies, workers and others affiliated in any manner 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.
SEBI further contended that SIRECL collected about Rs.6380 crore between 2009 and 2011 from over 75 lakh investors. On the other hand, SHICL collected around Rs.19,400 crore between 2008 and 2011 from over two crore investors.
The company then issued a public issue in the guise of private placement through OFCDs.
SEBI received various complaints regarding disclosures not made by the company about its Red Herring Prospects.
