SEBI, Sahara and Supreme Court

The Supreme Court order to arrest Sahara India chief Mr Subrata Roy on 4th March 2014 is a landmark day in judicial history of India because it reinforces supermacy of judiciary over corporate and political management of illegalities committed under illusion of being above the law. What started as a simple complain by an ordinary man named Roshan Lal , four years and four months ago to SEBI against fraud committed by Sahara Group firms, raising funds over Rs.24000 crores from the public for developing  different types of projects.  In fact the whole story is more sensational and mindboggling because it  contains all the types of manipulations possible under loose ended Indian financial and capital markets laws.It seems that in India Corporate sector is not bothered about the law till it reaches to its neck and even then it tries to evade it showing that for them there should be a separate set of laws . However this step of the Supreme Court has given a shock therapy to the corporate sector and restored once again faith of the common man that justice may be delayed but it is not denied. 

The background of the whole story goes back to 30th September 2009, when Sahara Prime City filed Draft Red Herring Prospectus (DRHP) with SEBI and while going through the DRHP , SEBI found some thing fishy in the whole exercise.  The two Sahara firms Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) were involved in large scale fund raising exercise In the month of December 2009 and January 2010SEBI received two more complains alleging that illegal means and methods were used to issue Optionally Fully Convertible Debentures (OFCD). Again Mr.Roshan Lal sent a complaint through National Housing Bank to SEBI stating that Sahara and its associate firms are involved in the large scale fraud and involvement of fictitious investors. Initially when SEBI enquired from Sahara then its reply was evasive and it was also non commital. Finally on November 24th 2010, SEBI passed an interim order  asking Sahara to refund the money to the investors. Sahara first moved to  Securities Applellate Tribunal and then to the Supreme Court asking for relief but orders went against it. And finally on 31stAugust 2012, the Supreme Court asked Sahara India to refund Rs 24000 crores to the investors and to deposit all the details of genuine investors with SEBI. These firms paid the first installment but they failed to deposit other two instalments.

Since Sahara was not cooperative and every time it was involved time buying tactics, SEBI again moved to the Supreme Court on 13th February, 2013, requesting the honourable Court to take stern action against Mr Subrata Roy and other Directors. And finally the end of all evasive activities came to an end when Mr.Subrata Roy was arrested and sent to Tihar jail on 4th March .2014. Rise of Mr.Subarata Ray is meteroic and in someway outstanding.He began his career as a modest businessman with the capital of Rs.2000 during 1970's when capiltal market was in its incesant stage and government laws were flexible enough to be manipulated when you are enjoying a political power. Sahara firms started many daily deposit schemes which attracted large number of people.Sahara empire started growing at fast pace.What seems today a fraud and scam of financial market, is actually a mismanagement of corporate affairs and use of  corporate laws in once favour where and when it can be twisted.

Now every political party is quite and not uttering even a single word, it is a worring factor .It also  a fact that almost all political party and big political leader have enjoyed a favour from Sahara India.Almost all film stars used to visit his house  and enjoyed parties thrown by Subarata Roy.Therefore today they all are either quite or supporting Mr.Roy.The reason are best known to them.But justice cannot be obliged and cannot be entertained by parties therefore it will be impartial.Let us wait for the final judgement.