The Securities and Exchange board of India (Sebi) today made a forceful plea to the Supreme Court to punish Sahara group chief Subrata Roy along with his two firms and their directors for not complying with its order for refunding Rs 24,000 crore to investors.
Refuting the contention of Roy who had submitted that he cannot be penalised for non-refund of the money by Sahara India Real Estate Corp Ltd and Sahara India Housing Investment Corp Ltd,Sebi said that the business tycoon held 70 per cent stake in the companies and is liable for contempt of court punishable up to six months imprisonment or fine.
By virtue of being promoter of the companies,he holds the same position as that of directors of the companies and he is also liable for contempt. He is liable for punishment along with other directors of the companies, senior advocate Arvind Dattar told a bench of justices KS Radhakrishnan and JS Khehar.
Dattar sought maximum punishment for Roy and others under Section 12 of Contempt of Court Act which provides maximum punishment of six months jail term.
Keeping in mind the magnitude of fund collected by the companies,it is fit case for imposing maximum punishment on Roy and companies, he said.
There cannot be a clearer case of contempt. Non payment of funds amounts to contempt, he said,adding that the companies have violated not one but three orders of the apex court.
The Sebi contended that the companies have not complied with apex court orders passed on August 31 and December 5 last year on the issue of refunding the amount.
During the argument,the bench asked whether the amount can be recovered from other companies of the group. Sebi contended that action can be taken against other companies as the money collected were invested in other companies of the group which is being headed by the same promoter..
Court issues fresh summons to Saharas top executives,Roy
Mumbai: A magistrate on Tuesday issued fresh summons to two Sahara Group firms and their top executives,including the groups chief Subrata Roy,asking them to appear on September 30 in connection with the alleged violation of regulations of the Companies Act and the Sebi Act.
The court had earlier taken cognisance of the case filed by Sebi and issued summons but no report was filed regarding service of summons (by Sebi) to the respondents,following which the court issued fresh summons against them.