SC asks Sahara Group to disclose source of money raised
“You (Sahara Group) tell us what is the source of this money? Did you get the money from other companies or other schemes to the tune of Rs 24,000 crore? Withdrew it from bank accounts? Or sold property to get it? It should be any of the three alternatives. Money did not fall from the heavens. You have to show from where you have got the money.
“Though we don’t doubt the capacity of your client to pay crores of money to investors, that too in cash in two months. But the entire explanation of the episode is difficult to digest. Tell us the source of the cash and there will be no need to open the pandora box,” a bench headed by Chief Justice T S Thakur said. The bench, also comprising Justices A R Dave and A K Sikri, which will hear the matter on the issue again on September 16, said “you start the hearing on that date by disclosing from where you got the money.”
“Show us the documents. How the money was lying in other schemes,” the bench said after senior advocate Kapil Sibal, appearing for Sahara Chief Subrata Roy, submitted that the group had raised money and paid to its investors in cash and the market regulator Sebi was running away from finding out crores of investors. “This is your (Sahara’s) claim. Sebi has a very simple question. Please tell us from where you got the money. You tell us and we will close the case. You tell us how you raised Rs 25,000 crore in cash,” the bench said.
Sibal said the group was open for any probe and even assuming that there is an apprehension that it is a case of blackmoney, the group can be investigated but “if it’s black money, who is Sebi to investigate? It is matter of Income Tax (Department).” However, the bench said the onus was on the business house to reveal the source of the money, whether it is accounted money or unaccounted money.
‘Repayments done from money with group companies’
Hours after the Supreme Court asked it to disclose the source of its money, the Sahara Group on Friday said the money collected through optionally fully- convertible debentures (OFCD) were invested in various assets and the group companies made the money available when the need arose for making repayments to the investors. The group’s statement, which came after the apex court asked the company to disclose the source of money to the tune of Rs 25,000 crore that was arranged, said, “it is relevant to mention that Sahara operates from around 5000 branches across the country and all the payments were made through those branches only. “It is this pan-India network of Sahara’s branches, which made the company to refund money.”
The group, through its lawyer, further said that all the documents pertaining to these repayments have been handed over to SEBI in original, along with the original bond certificates surrendered by the investors. It said that all the documents pertaining to the payments made to the investors have already been placed before the apex court. “Since the majority of the investors of Sahara do not have the bank accounts and they had made the investments in cash, therefore they were refunded and paid in cash only,” the statement said.