Roy's bailout hits court turbulence.
SC orders Sahara chairman to pay '36'000 crore to investors in 18 months after bail Roy's bailout hits
A' BAILOUT' from Tihar Jail for Sahara Group chairman Subrata Roy seems to be more difficult with the Supreme Court ( SC) on Friday setting a stiff condition that the conglomerate pays the entire '36'000 crore it owes to investors within the next 18 months after he is released on bail. The amount includes the '5'000 crore in cash and a bank guarantee of equal amount that the court has fixed for bail.
Immediately after a Bench of Justices T. S. Thakur' A. R. Dave and A. K. Sikri pronounced the judgement' Roy's counsel Kapil Sibal sought clarification asking whether a release is conditional on furnishing the bank guarantee. The Bench replied in the affirmative saying it is subject to deposit of '5'000 crore in cash and '5'000 crore in bank guarantee as per the March 26' 2014' order.
Sibal said that the Group was unable to secure the bank guarantee as the financial institution which had agreed to furnish it backed out when the Securities and Exchange Board of India ( Sebi) insisted on fixation of the trigger point for enchashing it.
" Trigger point has to be there'"the Bench said and clarified to Sibal that the period of 18 months will start from the date of Roy's release after he fulfils the bail condition. And on release' if Roy fails to adhere to meet the time frame for depositing money or defaults in payment with Sebi' he will have to surrender to custody' the court further said.
The court has allowed Sebi to Sibal says difficult to secure bank guarantee
encash the bank guarantees to be furnished by Roy in case he defaults in paying the two instalments.
The Bench' which accepted the format of bank guarantees in its judgement' said that the amount to be paid to the market regulator by Sahara is a huge liability' which the firm is bound to discharge by depositing the same with Sebi.
" Keeping in view the total liability' which according to Sebi' has risen to '36'000 crore ( approximately)' the contemnors shall deposit the balance outstanding amount within a
period of 18 months commencing from the date of their release from custody in nine instalments'"the Bench said.
The court said that that first eight instalments shall be of '3'000 crore each' which shall be payable every two months from the date of their release from custody' while the last instalment shall be of the remaining amount.
Sibal said that it is difficult to secure a bank guarantee of '5000 crore and wanted it to be reduced to '4'000 crore.
The Bench asked him to file an application in this regard and suggested that instead of '5'000 crore in cash' Sahara should deposit '6'000 crore in cash.
The Bench also directed Roy and two other jailed Sahara directors- Ravi Shankar Dubey and Ashok Roy Choudhary- to deposit their passports with the court.
" They shall not leave the country without prior permission of this court'"the Bench said. It also asked Roy to keep apprising fortnightly the Tilak Marg police station of his movements inside the country.
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