Sebi to SC: Punish Subrata Roy with his Sahara cos for contempt of court
SEBI today made a forceful plea to the Supreme Court to punish Sahara 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 (SIREC) and Sahara India Housing Investment Corp Ltd (SHIC), the market regulator said that the business tycoon held 70 per cent stake in the companies and liable for contempt of court punishable up to 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 can not 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 market regulator contended that the companies have not complied with apex court orders passed on August 31, 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.
The court was hearing three contempt petitions filed against Roy, the two firms and their directors who will present their case on the next date of hearing on August 6.
The apex court had on August 31 last year directed the Sahara group to refund the amount by November end.