The Sahara Scam 503z64

THE SAHARA SCAM

THE SAHARA INDIA PARIWAR: AN INTRODUCTION • Sahara India Pariwar is an Indian conglomerate headquartered in Lucknow,India. • It was started by Mr. Subrata Roy in 1978. • It has business interests in finance, infrastructure and housing, media and entertainment, consumer merchandise retail venture, manufacturing and information technology. • The group operates 4,799 establishments under the Sahara India umbrella.

• The group is a major promoter of sports in India and was the main sponsor of the Indian cricket team. • It owns a 42.5% stake in Formula One’s Force India Formula 1 Team and also sponsors India national field hockey team.

• Sahara India Pariwar’s Sahara Q Shop entered into the Guinness World Records when it opened 315 outlets in 10 states of India, just at one time on April 1, 2013.

TIMELINE

•November 2010 - Securities and Exchange Board of India(SEBI) barred Sahara India Pariwar chief Subrata Roy and two of its companies – Sahara India Real Estate Corp (SIREC) and Sahara Housing Investment Corp (SHIC) from raising money from the public as they had raised several thousand crores through optionally fully convertible debentures (OFCDs) that SEBI deemed illegal. •December 2010 - Sahara appealed in the Allahabad High Court, which ordered SEBI not to take any action until a court order is ed. •January 2011 - Delhi High Court issued a warrant against Sahara India Pariwar chairman Subrata Roy and four other officials of the group on a complaint that it deceived investors in a proposed housing project of Rs. 25,000 crore.

•February 2011 - Delhi High Court stays proceedings against Sahara India Pariwar chairman Subrata Roy and four other officials of the group on a complaint that it deceived investors in a proposed housing project. •May 2011 - Supreme Court of India asked Sahara India Real Estate (SIREC) to furnish the format of the application for its optionally fully convertible debenture (OFCD) scheme and a list of accredited agents that raised money on the company's behalf.

•June 2011 - SEBI ordered Sahara firms to immediately refund the money collected through its sale of OFCDs. •October 2011 - Securities Appellate Tribunal (SAT), set up by the Supreme Court, ordered two unlisted Sahara group companies to refund within six weeks about Rs. 17,656.53 crore with 15% interest, which it had raised through OFCDs. •November 2011 - Sahara India Pariwar moved the Supreme Court against SAT's order and the Supreme Court stayed the SAT order, and asked the two companies to refund Rs. 17,400 crores to their investors and asked the details and liabilities of the companies.

•January 2012 - Supreme Court gives three weeks time to Sahara India Pariwar to choose between options to return investments made by public in its OFCD scheme. Sahara to either to give sufficient bank guarantee or attach properties worth the amount raised through OFCDs. •May 2012 - Supreme Court is informed by senior counsel Fali Nariman of Sahara India Real Estate Corp that SEBI could not have taken up this issue of Sahara Group of companies raising funds through OFCD as there was no complaint from any investor.

•June 2012 - SEBI informed the Supreme Court that the real estate division of Sahara India Pariwar had no right to mobilize Rs. 27,000 crore from investors through OFCD without complying to the norms of the market regulator SEBI. •August 2012 - Supreme Court directed Sahara India Real Estate Corporation Ltd. (SIRECL) and the Sahara Housing Investment Corporation Ltd. (SHICL) to refund over Rs. 24,400 crore to its investors.

•February 2014 - Subrata Roy arrested by Uttar Pradesh police for failure to appear before the Supreme Court. •March 2014 - Subrata Roy, along with two other directors of Sahara, sent to Tihar jail. •March 2015 - Supreme Court stated that the total dues from Sahara have gone up to Rs 40,000 crore with the accretion of interest. •July 2015 - SEBI cancelled the licence of Sahara’s mutual fund business. •May 2016 - Subrata Roy released on parole from Tihar jail.

CURRENT SCENARIO NEW DELHI: Sahara Chief Subrata Roy was today asked by the Supreme Court to pay Rs. 600 crore by February if he wants to stay out of jail. Mr Roy, who is out on parole since his mother's death in May this year, has been asked to surrender if he cannot pay this money by February 6. His parole was also extended.

The Sahara group has been engaged in a long legal battle with capital market regulator Sebi over the refund of Rs. 24,000 crore to investors. Sahara has paid around Rs. 11,000 crore and submitted a plan saying it will pay the rest of the money in two and a half years. "You had said earlier you have properties worth Rs. 1,87,000 properties. But those don't come to your help for repaying Rs. 20,000 crores," the court said to Sahara. Senior lawyer Kapil Sibal, representing Sahara, said the state of the market is bad. The Supreme Court, however, shot back, "Market business is a matter of perception. For some it is good, for some it is bad."

THANK YOU