Supreme Court asks Sahara Group to shell out $5.7B to SEBI by December 2016
Reuters | Photo Credit: Subrata Roy

The Supreme Court of India on Friday asked jailed Sahara chief Subrata Roy to furnish INR 5,000 crore in cash and a bank guarantee of equal amount to secure his release from the prison.

Roy will, however, remain in jail as senior advocate Kapil Sibal appearing for him told the court that there was a difficulty in furnishing the bank guarantee of Rs 5,000 crore as one of the financial institutions had backed out.

A bench of justices T S Thakur, A R Dave and A K Sikri while pronouncing its order said, "We have accepted the format of bank guarantees", subject to certain conditions.

The court also asked the 65-year-old Roy, who has been in Tihar jail since March 4, 2014, to pay Rs 36,000 crore to the SEBI within 18 months and in nine instalments from the date of release.

It allowed market regulator SEBI to encash the bank guarantees to be furnished by the Sahara chief, in case he defaults in the payments of two instalments.

The bench further said that if Roy defaults in payments in three instalments, then he will have to surrender himself back to the jail.

"We direct them (Roy and two other jailed directors) to deposit their passport with the court. They shall not leave the country without prior permission of this court," the bench said.

It also asked Roy to keep apprising fortnightly the Tilak Marg police station here about movements inside the country.

The bench, meanwhile, extended by eight weeks the facilities like telephone and internet to Roy inside the jail.

Earlier on May 14, while reserving its order, the court had asked the counsel of Sahara Chief to furnish the "scheme" within two weeks giving details as to how the group proposes to proceed with the sale of its assets and payment to the SEBI.

The apex court on August 31, 2012 had said the group was required to refund Rs 24,000 crore with 15 per cent interest in three months to the depositors. 

Earlier, the court had said that there was a need to resolve the dispute over the total amount which Sahara Group was liable to pay to its investors even if the group complied with the condition of paying Rs 10,000 crore to ensure the release of Roy from jail.

The issue of payment of balance amount had arisen as the claim of Sahara refunding the amount has been disputed by SEBI maintaining that there have been contradictions on refund theory by Roy's group and even the apex court in the past had not agreed to it.

The apex court had on March 23 expressed "prima facie satisfaction" and granted three months time to Sahara Group for selling its offshore properties for raising Rs 10,000 crore to ensure the release of Roy.

The bench had said in the eventuality of failing in negotiations, its properties would be put to auction by appointing a 'court receiver' for alienating its assets.

The court had also extended its August 1, 2014 order allowing Roy to use the conference room in Tihar jail complex to hold negotiations with potential buyers to sell his three luxury hotels--Dream Downtown and The Plaza in New York and Grosvenor House in London--to raise Rs 10,000 crore to get regular bail.

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