Subrata Roy’s investor refund woes widen to Rs 36,000 crore as guarantor backs out

New Delhi(dna): Sahara Group chief Subrata Roy slumped into more trouble today as the Supreme Court on Friday fixed his investor money refund liability at Rs 36,000 crore and asked him to pay it in 18 months’ time.

Roy along with two of his directors is in jail since March 4 last year after failure to comply with SC’s orders to refund the investors’ money.

His efforts to secure bail also got jolted on Friday as his lawyer Kapil Sibal told the court that the financial institution which had agreed to give bank guarantee of Rs 5,000 crore had backed out.

As the bail condition, Roy has to deposit Rs 10,000 crore (Rs 5,000 crore cash and same amount of bank guarantee) with the court.

In its order, the bench said the company will have to pay the liability of Rs 36,000 crore, as raised by SEBI including the principal amount of Rs 24,000 crore with 15% interest, in equal installments of Rs 3000 crore within 18 months.

The first installment will be for Rs 3,000 crore, to be paid within two months of their release. The bench said the bank guarantee shall be encashed in case the company fails to pay two installments consecutively or otherwise, as per the order.

The court also ruled that if Roy fails to deposit any three installments, he and two other directors of Sahara, who are also currently in Delhi’s Tihar jail, will be taken into custody.

Meanwhile, Roy’s lawyer submitted sought more time to arrange the bank guarantee and the court extended the facilities provided to Roy for asset-sale negotiations in jail by eight weeks.

Roy’s counsel also told dna that they have no objection to Sebi’s demand for principal amount of Rs 24,000 crore, but disputed the interest amount raised by it.

The court, which observed that it was compelled to send Roy and his associates to jail due to their “stubborn attitude”, made it clear that the conditions will be operational after they are released from jail.
The bench headed by Justice T S Thakur had accepted the bank guarantee format submitted by Roy to the court in its last hearing. The court had also got the nod of market regulator Securities Exchange Board of India (Sebi).

The bench said the conditions were imposed after Roy failed to provide trigger point for encashment (when the bank guarantee can be encashed) in the bank guarantee format.

“Furnishing the bank guarantee without stipulating the situations in which the guarantee shall become encashable will be meaningless. The bank guarantee is actually meant to ensure that the entire amount is deposited by the contemnors (Roy and others) once they are released from custody…,” it said.

The court also directed Roy and his directors to deposit their passports in this court within 15 days from the date of this order or before their release, whichever is earlier.

“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 in New Delhi about movements inside the country.