India's Sahara denies wrongdoing in $4.5-bn refund order
India's giant Sahara business group, charged with illegally raising
$4.5 billion from millions of small rural savers, took out huge ads on
Saturday declaring it never does anything "against the law".
The two-page newspaper adverts appeared before a Supreme Court
hearing set for Monday on the case which has put the practices and
finances of the conglomerate, headed flamboyant billionaire Subrata Roy,
in the public spotlight.
Sahara, a household name in India through its sponsorship of the
national cricket team, "is never against the law or the spirit behind
the law", the ads stated.
Late in August, the court said Sahara, whose interests run from real
estate to entertainment to financial services, had "no right to collect"
funds from 29.6 million investors "without complying with any regulatory
provisions".
Stating "an iron hand" must be used to deal with "economic offences",
it told Sahara to deposit 240 billion rupees ($4.5 billion) with market
regulator the Securities and Exchange Board of India (SEBI) by November
30 or risk having its assets seized. The Sahara empire embraces the
iconic New York Plaza Hotel, purchased just last month for $575 million,
a stake in a Formula 1 racing team and a sprawling Indian luxury
township.
Sahara said it had already refunded a large chunk of the money,
collected through bond schemes, directly to savers.
But SEBI has filed a contempt petition accusing Sahara of
"non-compliance" with the refund order that stated the funds should be
deposited with regulators to ensure the money went back to the savers.
The dispute is the latest in a string of run-ins between regulators and
Roy, a hero to millions of poor Indians for his rags-to-riches story and
who lives in a mansion modelled on the White House -- only bigger.
In 2008, Sahara shut its operations as India's biggest non-bank
deposit-taking firm on the orders of the Supreme Court which was worried
about the soundness of the investments in which the money was being
parked. |
