Statement of Advocate Gautam Awasthi on yesterday’s Supreme Court Proceedings


“Today, we are extremely thankful to our Hon’ble Judges who have opened the path after 5 months for Saharasree to reintroduce him and his presence in the work sphere. He never could get a chance to talk to anybody. Here in the jail, Subrata Roy Sahara used to get only 35 minutes and additional few calls at times in a week.

Actually from today only the business is starting to fulfill the direction of Hon’ble Court though these are all double payments.

So, on 22nd July, 2014, we got the permission for mortgage and sale of overseas assets and today on 1st August, 2014, we are going to get the support of all kinds of communications round the clock with office staff and technical support.

Since all the assets, every Rupee, every inch of all immovable properties, every gram of movable properties were under absolute embargo no payment in compliance of order dated 26th March, 2014 could have been made. Immediately after lifting of embargo on Bank account etc. things have started improving from beginning of June and consequently a substantial part of the cash payment of Rs.5000 crores could be deposited.”

The Sahara Group has thanked the Supreme Court for lifting the freeze on its moveable and immovable assets so that it can raise the Rs 10,000 crore for part payment of dues, but also said it had repaid the bulk of money owed to investors.

“We are very thankful we got clearance of bank accounts and certain select properties,” Sudeep Seth, Sahara’s lawyer, said in a statement on the behalf of the group after the Supreme Court gave it the go-ahead Wednesday for sale of its assets in India.

“However, the fact remains that Sahara has already repaid 93 per cent of the investors, mostly in cash, and has submitted all repayment vouchers receipts and other documents in original with SEBI (Securities and Exchange Board of India), which SEBI has to verify.”

The group said the actual repayment that was pending amounted to just Rs 2,500 crore and that there was not even a single complaint against Sahara. The group also claimed that Rs 5,600 crore of its money was already lying with the markets watchdog.

“Of course, all the money shall ultimately come back to Sahara after verifications.”

De-freezing the assets of Sahara on Wednesday, an apex court bench of Justice T.S. Thakur and Justice A.K. Sikri also directed that the money so generated would have to be deposited in an account opened by the regulator.

Soon after the judgment, senior counsel Srinivasan Ganesh asked the court to grant five days’ parole to Sahara Group chief Subrata Roy to be with his ailing mother. The court asked him to file an application and said it will pass an order after the regulator’s reply.

“Today, we are reassured of justice in the Indian judiciary. Over the last 37 years, we have always been given justice on merit. We are reassured that the Indian judiciary can never go wrong,” Sahara lawyer Seth said.

“From November 2013, all of group’s bank accounts, every inch of immovable properties and movable properties were frozen and were under an embargo of the Hon’ble Court and SEBI,” he said.

“As a result, Sahara was not in a position to get or raise even Rs 100. The question is as to why Rs 5,000 crore cash plus Rs 5,000 crore bank guarantee bail order was given without lifting any embargo,” he said, referring to Roy’s quantum of the bail amount.

Seth also said the demand of Rs 20,000 crore plus interest imposed on the group to be paid to the regulator was tantamount fo Sahara being asked to pay twice for a single liability — and that, too, for one that had substantially been repaid.

“No financial institution can repay twice for one liability.”

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Two days ago, some 24 hours after Sahara’s Subrata Roy was arrested at the command of the Supreme Court, I had an interesting phone conversation with a Sahara depositor. This was someone who was not just made a deposit with Sahara in the past, but was planning to do so again soon. He knows many people who are regular Sahara depositors. He had a form with him for two schemes. One of them offered a gain of 10% for a tenure of one year, and the other, a gain of 40% for a deposit period of 48 months.

That’s also about 10%. There are several things here that those who are acquainted with the Sahara affair only through TV and newspapers would find surprising. One, there is still financial business being conducted under the Sahara brand. This example is from Jharkhand, and not from a small town either. Two, there are people who are still willing to deposit money with Sahara. This particular depositor is an educated man who has access to the entire range of financial instruments.

Three, I think there are at least some media commentators who would be surprised that there is any such thing as a Sahara depositor. And four, those who’ll try to think through this thing will see that 10% per annum is hardly an outsize or a Ponzi-like return being offered.

So why are people still willing to deposit money with Sahara? As far as I can see, simply because they started doing so in the past and the experience has not been negative. They did so in the past, got their money back with the promised returns and it just goes on, even when they have access to alternatives.

One thing about Sahara, which is getting lost in the excitement about the legal tricks that the Sahara group has been playing with Sebi and RBI, is that there is a real savings and investments business that exists. This business is likely to be illegal now, likely to be declining, it may be wrapped up in a larger money-laundering scheme, and its scale may be smaller than the claims of Sahara.

However, there really are a large number of depositors who use Sahara’s services and have done so for years, even decades. This is something that anyone who has first-hand familiarity with life in small towns of the Hindi belt can vouch for. This business still exists. When, in 2008, RBI asked Sahara to wind up this business, it should have done so in a law-abiding manner. However, it didn’t and RBI failed to detect that it didn’t.

Currently, there is a lot of noise being made about the interests of depositors by various authorities and the media. However, the actual focus and the actions do not have the depositors’ interests at heart. One reason is that there is a certain belief that these depositors don’t exist, that Sahara is entirely a money-laundering scheme.

This simply isn’t true. To my mind, the most important question today is what is the real base of investors and if there are enough assets backing their deposits. The long period over which Sahara has existed and the reasonable returns it offers make it unlikely that it’s an out-and-out ponzi scheme like Saradha in Bengal and so many others.

However, there may well be some shortfall in assets. Sahara may be a rogue financial institution. And if the rogue part of that description is true, but so is the financial institution part. The most important thing today is to provide a safe exit to real depositors. The cat and mouse game of the so-called Sahara Shri will no doubt continue to entertain all of us for a while. However, someone needs to pay some attention to the real small depositors.

By: Dhirendra Kumar CEO, Value Research


Sahara group, whose legal battle with Sebi continues in Supreme Court over refund of over Rs 20,000 crore to investors, has made a surprise announcement of plans being afoot to hire over 56,000 new employees this year along with investments to the tune of nearly Rs 32,400 crore.

In three-page newspaper advertisements, the group has invited applications for senior positions across business verticals within and outside country and said that these more than 56,000 new jobs need to be filled by the end of 2014.

In three-page newspaper advertisements, the group has invited applications for senior positions across business verticals within and outside country and said that these more than 56,000 new jobs need to be filled by the end of 2014.

At the same time, it has also claimed that the group, which calls itself Sahara India Pariwar, is “committed to creating four lakh salaried positions in next three years”.

The businesses for which job applications have been invited include FMCG & retail, dairy, poultry, luxury real estate and lifestyle, food factory, low-cost housing, CSR, education and even cruises (Sahara Water Homes).

The businesses for which job applications have been invited include FMCG & retail, dairy, poultry, luxury real estate and lifestyle, food factory, low-cost housing, CSR, education and even cruises (Sahara Water Homes).

Besides job details, the group also disclosed specific investment targets for at least four business verticals and these investments total to an amount of Rs 32,394 crore.

For its ‘Luxury Retail: Sahara Global Master craft Ltd’ business, the group said that an investment of Rs 1,400 crore would be made over five years, while Rs 5,172 crore would be invested in Food & Beverages and Entertainment: QSR (Quick Service Restaurants).

Its ‘International Business: Macedonia (Europe)’ business is expected to see an investment of Rs 13,922 crore in dairy project and Rs 9,600 crore in hospitality project.

Further, healthcare would seen an investment of Rs 2,300 crore for 5-7 years, according to the public notice.

The group also claimed a huge asset base with a market value of “Rs 1, 52,518 crore” and a land bank of 36,631 acres.

This massive recruitment drive comes at a time when the group is caught in a legal battle with Sebi, which had charged it of raising over Rs 24,000 crore through various “illegalities” in issuance of certain bonds through two firms.

These two firms — Sahara India Real Estate Corp Ltd (SIREC) and Sahara India Housing Investment Corp Ltd (SHIC)– were asked to refund the money to investors, while the Supreme Court also asked the group to comply with Sebi orders.

Sahara group later deposited Rs 5,120 crore with Sebi and claimed that it was way above the outstanding amount due to be returned to investors as more than Rs 20,000 crore were already refunded directly.

The Supreme Court has refused to allow Sahara Group chief Subrata Roy to leave the country till the companies provide details of refunding Rs 20,000 crore to investors.

The apex court last week asked the group to furnish all the documents to reveal the source of Rs 22,885 crore which it claims to have refunded to the investors.

Besides, the group was directed to place all documents including the bank statements sought by Sebi before February 11 when the court would take up the case for further hearings.


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