SC asks Sahara Group to disclose source of money raised

According to Sahara, the money collected through OFCDs were invested in various assets of the group and repayments were made in cash from around 5000 branches across the country.

By: ENS Economic Bureau | New Delhi | Updated: October 21, 2016 7:21:14 pm
SC asks Sahara Group to disclose source of money raised Senior advocate Kapil Sibal replied that the group had paid its investors in cash and the market regulator Sebi was running away from finding out investors after verifying their records.

The Supreme Court Friday asked the Sahara Group to substantiate its claim of having already refunded investors to the tune of Rs 24,000 crore by bringing on record the sources from where this money was drawn.

“You (Sahara) tell us what is the source of this money? Did you get the money from other companies or other schemes to the tune of Rs 24,000 crore? Or you withdrew it from bank accounts? Or sold property to get it? It should be any of the three alternatives. Money did not fall from the heavens. You have to show from where you have got the money,” a bench led by Chief Justice of India T S Thakur asked Kapil Sibal, counsel for Sahara chief Subrata Roy.

WATCH VIDEO: Sahara Chief Subrata Roy’s Parole Extended Till November 28

 

The bench added that although it did not doubt Roy’s capacity to shell out crores, the Group must reveal the sources of withdrawal of this money for disbursement to around 3 crore investors, who had put their money in Sahara’s OFCD.

“…the entire explanation of the episode is difficult to digest. Tell us the source of the cash and there will be no need to open the pandora box…Sebi has a very simple question. Please tell us from where you got the money. You tell us and we will close the case. You tell us how you raised Rs 24,000 crore in cash,” added the bench, also comprising Justices A R Dave and A K Sikri.

Senior advocate Kapil Sibal replied that the group had paid its investors in cash and the market regulator Sebi was running away from finding out investors after verifying their records. He added the group was open for any probe and even assuming that there is an apprehension that it is a case of black money, the group could be investigated by the Income Tax department.

According to Sahara, the money collected through OFCDs were invested in various assets of the group and repayments were made in cash from around 5000 branches across the country. It has maintained that since the majority of its investors did not have the bank accounts, they were paid in cash and the average investment in the OFCD was around Rs. 8,000. The court has asked Sahara to explain all this September 16.

Meanwhile, the bench also asked Sebi to examine Sahara’s plea for borrowing money from Reuben brothers of United Kingdom for depositing it in the SEBI-Sahara account opened at the apex court’s direction for refunding money to investors. Roy is currently out on interim bail.

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