Apr 16, 2013 01:58 PM IST | Source:

SEBI has gone beyond SC order, says Sahara Boss Roy

The row between Sahara Group and market regulator Securities and Exchange Board of India (SEBI) is likely to get even nastier as Group Chief Subrata Roy is calling SEBI‘s action against the group an act of personal vengeance.

The row between Sahara Group and market regulator Securities and Exchange Board of India (SEBI) is likely to get even nastier as Group Chief Subrata Roy is calling market regulator's action against the group an act of personal vengeance.

Playing a victim, Subrata Roy minced no words in criticizing the market regulator in an exclusive interview to CNBC-TV18 where he claimed that SEBI was making up stories without checking facts. He even went on to say that SEBI had gone beyond Supreme Court's order and was breaking all rules and law.

The market regulator had today called Roy and three other group directors to discuss sale of group's properties and recovery of unpaid dues. SEBI and Sahara Group has been in a tussle after the Supreme Court order directed the market regulator to attach properties of Sahara Group in connection with the refund case involving an estimated Rs 24,000 crore payment to over 30 million small investors.

In February, SEBI had ordered a freeze on the assets and bank accounts of the two Sahara group companies namely Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC).

Roy said that in the meeting held today, SEBI demanded details of his personal properties. Surprisingly, Roy who is known for living a lavish life claimed to have no immovable properties and said that he had cash of around Rs 2 crore in bank accounts and gems and jewellery worth Rs 1 crore only.

"Company provides us all facilities...personally I am not a very rich man, the company is very rich," he said. 
Roy said that many other government investing agencies were activated against the group and hinted that there were political motives behind  actions of Reserve Bank of India and SEBI. He promised to come out with the truth and proofs of vengeance against the group at the right time.

On various occasions earlier, including through newspaper advertisements, Sahara Group has accused SEBI of not providing an opportunity to meet the group chairman Roy for presenting their point of view. Sahara claims that it has already repaid most of the investors directly and its total outstanding refund liability was less than Rs 5,120 crore, which it has given to SEBI.

Now, the Securities Appellate Tribunal (SAT) is scheduled to hear Subarta Roy's appeal against a previous SEBI order for attachment of its bank accounts, assets and investments on April 13.


Below is the edited transcript of the interview on CNBC-TV18

Q: You spent an hour at the Securities and Exchange Board of India (Sebi) headquarters. What were the kind of questions that the market regulator asked you?

A: Since we already sent our affidavit of assets, the questions were not many. The market regulator asked us if there were any more assets to declare and we replied that the affidavit contains all our assets. Then the market regulator asked for the documents for immovable  properties and I replied that there were no documents since had no immovable properties in my name.

Q: Did you actually tell SEBI that you have no immovable property in your name? It is unthinkable that Subrata Roy actually has no immovable property, residential or commercial, in his name.

A: I know. To my knowledge, my wife has a small flat in Gurgaon and my son has recently purchased two acres in Goa. That’s probably the total immovable property owned by my family.

Q: What about the palatial bungalow that you stay in at Lucknow? Who does that belong to?

A: It is completely owned by company.

Q: Did you tell SEBI that you have only Rs 34 lakh in your bank account?

A: No. I have around Rs 2 crore in my bank account.

Q: So in your bank account there is cash only worth Rs 2 crore?

A: Yes, it is very surprising, but I am very happy and satisfied with it.

Q: It is extremely surprising. And how much in terms of gems and jewelery?

A: I don’t know how much my wife’s jewelery is worth. The gems and stones I wear are worth around Rs 1 crore.

Q: It is common knowledge that you are a man who lives life king-size. And yet you say you have no immoveable property in your name and your bank balance is only to the tune of Rs 2 crore?

A: Personally, I am not a rich man at all. But the company is very rich. The company keeps us well and provides us with all the facilities.

Q: Has SEBI sought any more information? Has it sought additional statements to verify the documents that you may have already presented? Are you supposed to meet with SEBI again?

A: I am always ready to meet SEBI again. I’m always wanted to meet them. Sahara is a open book. Any body can come and check anything they want. But they are not coming, I don’t know why. They are creating all these stories, coming to wrong conclusions and doing all tricky things.

Q: Why are you angry because SEBI is merely operationalising a Supreme Court order which authorised SEBI to attach your assets?

A: SEBI should understand that Supreme Court order is based on the very old figure. Apart from the amount of Rs 5000 crore deposited with SEBI, all other liabilities have been repaid before the Supreme Court announced its judgment– before August 31, 2012. This is the truth.

Q: Why did you not appeal in the Supreme Court? The Supreme Court took cognisance of the argument and still authorised SEBI to go ahead.

A: Nobody checked that number. We have made all the payments before the judgment was announced.

Q: So what is the truth?

A: SEBI should go and verify the facts. How can it conclude before verification? SEBI has all the documents and has the liberty to come and check.

Q: Why has SEBI managed to authenticate only a little over 200 account-holders?

A: We have the small investors who have invested anything between Rs 1,000-Rs 15,000. How can you expect the person who has been repaid to spend even Rs 5 to post a reply?

Q: Why should people believe you when the market regulator says that you have not repaid that money and the Supreme Court agreed?

A: It is tricky and badly presented. The honourable Supreme Court has said if there is any confusion regarding some of the investors, SEBI must approach Sahara and then arrive at a conclusion. We have repeatedly written to SEBI to send us the list of these 30,000 investors who have not received the repayment yet.

Q: Is the Sahara Group guilty of intimidating their account holders to shift to other Sahara schemes?

A: Nobody has approached us regarding any investigation. Agencies are investigating, concluding and making these stories. What can we do?


Q: But has the repayment been made at all?

A: How can anybody raise a question without checking or verifying? We have presented the statement of our statutory auditor and notary affidavits of our branch managers confirming the repayment. Nobody is verifying them and instead they are making all kinds of stories.

Q: If SEBI were to begin the process of attaching immovable as well as movable assets, what will happen to your business plans?

A: How can they do it? It is not as per the direction of honourable Supreme Court. It has gone beyond the direction of honourable Supreme Court and it has no right.

Q: How do you say it has gone beyond the honourable Supreme Court’s direction because it is merely carrying out the Supreme Court order under Section 144?

A: The Supreme Court order clearly says that SEBI should proceed as per the law and not break all the rules and regulations. SEBI was recently pulled up by one of the courts for issuing a summons for personal appearance without issuing a show cause notice or following proper judicial procedure.

Q: But the Supreme Court very categorically told Sebi that it was free to attach assets and recover the dues?

A: Only of two companies. The honourable Supreme Court said that the assets of only two of Sahara’s companies could be attached.

Q: What about the matter pending before the Securities Appellate Tribunal (SAT)? When is the SAT hearing coming up?

A: It is pending and the hearing is scheduled for April 13 or 14 where we have challenged SEBI's right or jurisdiction.


Q: Has anyone from the Mumbai economic offences wing (EOW) contacted you or with anybody from the Sahara Group regarding the investigation of Sahara Group’s operations regarding the repayment of funds?

A: Not yet. I hear the SEBI is initiating all sorts of action through all kinds of government agencies. It can do anything and we have to accept it.

Q: Why do you believe SEBI is after you? Why do you believe that you are a victim?

A: It is a long story. Let’s us not talk about it at the moment.

Q: Do you believe that there are political interests involved?

A: All this started a long time ago.

Q: Is there any political interest or no political motivation keen to see your downfall?

A: I am not saying that. Since the problems started in 2005, it is the outcome of some political thing of the past.

Q: Why do you think you have had trouble with the Reserve Bank of India, SEBI and the Supreme Court?

A: Everything went against us when our residuary non-banking company business performed well. We are the only company involved in financial inclusion. We were told it was not a viable business and we have shown that it is viable by repaying the Rs 18,000 crore three years in advance. But nobody accepts or understands these things.

Q: What happens to your core business which is based on trust?

A: Have any of our investors got one complaint against till today? No. We have 11 crore stakeholders– investors, depositors, customers all together. Not a single complaint has been filed yet.

Q: But didn't all this begin on the basis of a complaint?

A: That complainant’s address is yet found. Roshan Lal is a fictitious person.

Q: What happens to your plans?

A: Everything will grow faster. But there is one request I want to make through your channel- the media has a big responsibility. The media should go for the truth and dig the truth in the interest of the country.

Q: What gives you the confidence that you will grow at a much faster pace?

A: Nobody on this earth can prove right as wrong. I expect from media will act like a big brother and for the interest of the country and the interest of 50 lakh people who are dependent on Sahara, come up with truth and see that justice is done.

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