The Securities and Exchange Board of India (SEBI) has issued a bailable warrant against businessman and Sahara India Parivar founder Subrata Roy for not appearing before the court in connection with a cheating case worth more than Rs 25,000 crore.
The warrant was issued by SEBI Special Court Judge V.S. Gaike on September 6, during the hearing of a 2014 case by SEBI against Sahara Housing Investment Corporation Ltd (SHICL), Sahara India Real Estate Corporation Ltd (SIRECL) and others.
Roy, who was an accused in the above cases, was supposed to appear before the court, but he remained absent. His Counsel filed an application for exemption on the ground of his medical condition post Covid-19.
The Counsel said that Roy suffered from Type 2 Diabetes as well as hypertension. He also placed on record, a medical certificate issued by Sahara Hospital, Lucknow.
The application was opposed by the SEBI’s Counsel, who said that Roy had undertaken to remain present in the court after disposal of his discharge application and that post-effects of Covid-19 lasted only for three to four days.
He apprised the SEBI Special Court that in 2017, the Bombay High Court had directed Roy to remain present before the trial court on all dates post the disposal of his discharge application in the case. However, as per the roznama, Roy had not appeared after 2019.
While rejecting his application for exemption, the court also issued a bailable warrant of Rs 25,000 against Roy.
The order was, however, kept in abeyance for a week as Roy’s lawyers sought to challenge it before the High Court.
As per the allegations, a special resolution was passed to raise funds through the issuance of unsecured Optionally Fully Convertible Debentures (OFCDs) through a private placement of friends, associates, group companies, workers, and others affiliated in any way with the Sahara Group of Companies.
SEBI revealed that SIRECL received around Rs 6,380 crore from over 75 lakh investors between 2009 and 2011, while SHICL received around Rs 19,400 crore from nearly two crore investors between 2008 and 2011.
The Board said the business allegedly launched a public offering disguised as a private placement using OFCDs.
According to SEBI, it received several complaints concerning the company’s failure to disclose its Red Herring Prospectus, which claimed that the company had no plans to list the OFCDs on any recognised stock market.