Millennium Post

Sahara chief may have to be in jail for quite some time

A day after the apex court imposed a condition that Roy will be freed on bail only if he pays Rs 10,000 crore out of which Rs 5,000 crore has to be in bank guarantee, his lawyers said providing a guarantee of this size with lower margin cash backed by assets will take at least three months.

Advocate Keshav Mohan pointed out that a bank guarantee of Rs 10,000 crore with lower margin cash backed by assets takes three months. ‘So if we go for Bank Guarantee now, it will mean putting 100 per cent cash margin. Therefore, the order implies that Rs 10,000 crore cash is wanted to secure release from jail, if the release is desired before 3 months’ he explained.

‘Roy has been is in custody for the last 22 days, and an embargo has been imposed on the sale of assets and bank accounts of the entire Sahara Group, which have already been frozen by Sebi’ Further, title deeds of assets having value over Rs 20,000 crores are lying with Sebi.

If case by case, the Hon'ble Court allows the sale of all these assets, it will be a distress sale which would not fetch more than 20-25 per cent of the real value of the asset. Moreover, money from the sale of bigger assets will only come in long-term installments in view of Indian financial strength,’ observed Mohan.

‘The precondition to the bail of such a large amount appears unusual and is not a surety for securing the presence but a mode of recovery. Under these circumstances, any human being can understand the impossibility of fulfilling even 10 per cent of the Hon'ble Court's conditions and requirements,’ he added.

‘Sahara has huge apprehension that monies paid to Sebi will remain with Sebi for a very long time as they have not shown any intention to verify accounts till yet. In fact, in the last 18 months they have not started any process of verification of investors, so that they can be identified and money can be refunded to them by Sebi,’ observed Mohan.

‘We are the custodian of our investor’s money since last 37 years, providing quality services to our depositors and customers without any complaint or any charges against us till today. As custodian one has to follow certain basic golden rules very strictly in the interest of investors and by following these strict rules and principals we have been able to gain unprecedented confidence amongst our investors, he added.

R K Dhawan, the counsel of Sahara said, ‘Moments are very rare when we have to tell the court that you are terribly wrong. This is a very very extraordinary situation.’ Ram Jethmalani, senior counsel from Sahara, said, ‘It is unusual to ask a person to pay Rs 10,000 crore for bail. No process has been followed in sending Subrata Roy to custody.’
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