SVKM’S NMIMS

SCHOOL OF LAW

A PROJECT SUBMITTED ON

SUBROTO ROY (SAHARA) VS SEBI- INVESTOR FRAUD CASE

IN COMPLIANCE TO THE PARTIAL FULFILLMENT OF THE MARKING

SCHEME FOR TRIMESTER IV 2014-15, IN THE SUBJECT OF JOURNALISM

AND MASS COMM-I

SUBMITTED TO FACULTY

Mr. JOYANTO MUKHERJEE

FOR EVALUATION

SUBMITTED BY:-YASH VIJAY

ROLL NO: - A049

COURSE: - B.A. LL.B. (Hons.)

DATE: - 13 SEPTEMBER, TIME: -

11:00 am

RECEIVED BY: - …………………..

ON DATE: - ………………………..

TIME: - …………………………….

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INDEX

SR.NO. TOPICS PG.NO

1.)

TABLE OF ABBREVIATIONS

RESEARCH METHODOLOGY

Relevance of the Topic Objective of Study Research Questions/Hypothesis Limitation of Research

2.) INTRODUCTION

3.) MAIN CONTENT

4.) ROLE OF MEDIA AND MEDIA TRIAL

5.) THE CASE STATUS

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ABBREVIATIONS

1. OFCD- optionally fully convertible debentures

2. SC- supreme court

3. HC- high court

4. SEBI- securities and exchange board of India.

5. TDS- tax deductable at source

6. SAT- Securities Appellate Tribunal

7. RTAs- registry and transfer agents

8. SIREC-Sahara India Real Estate Corp.

9. SHIC-Sahara Housing Investment Corp.

10. ROC- Registrar of Companies

11. RBI – reserve bank of india

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RESEARCH METHODOLOGY

In my research, I have adopted the secondary research method wherein I have read and researched through the statistics provided by the others. Though my topic is a case study wherein I should have involved primary research, due to the time constraint, I relied on secondary research.

AIM AND OBJECTIVE:

THE main objective of the above study is to know the inside out of the SAHARA vs SEBI-

investor fraud case. The main aim is to know the role of Mr. Subroto roy in the fraud case as

director of the sahara parivar. To know the functions of SEBI as market regulator and

significance of SEBI in this particular case. the objective is to know the facts and importance

of case as to investor point of view and to know the functioning of the banks and market

regulators and most important is to understand the role of media in this case.

RESEARCH QUESITIONS:

1. What are the functions of SEBI as capital market regulator?

2. Role of subroto roy in investor fraud case ?

3. What is investor fraud case?

4. Role of SEBI in fraud case?

5. Role of supreme court?

6. What is the present condition of the case?

7. Role of ROC in fraud case?

8. Role of media in case?

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SCOPE OF STUDY

The analysis of the case gave a new perspective to it and the legal aspects came to be known.

By researching and analyzing the case and the outcomes, there is a better understanding of

the procedure of a trial, the collection of evidence and the procedure of forming a new law.

LIMITATION OF THE STUDY

Since the research is secondary in nature, there could not be a much better perspectiveprovided. Also due to the time constraint, primary research could not be conducted

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INTRODUCTION:

SAHARA INDIA PARIVAR

Sahara India Parivar is an Indian conglomerate headquartered in Lucknow, India. The

company has a market capitalisation of US$25.94 billion as of March 2011. Current there are

121,653 employees. In 2004, the group was termed by the Time magazine as ‘the second

largest employer in India' after the Indian Railways.

Sectors:

1. Financial services

2. Construction

3. Media and entertainment

4. Information technology

5. International hotel

6. Dairy& Hospitality

7. Manufacturing

8. Sugar factory

FINANCIAL SERVICES-

Sahara has interests in insurance and asset management. Sahara India Life Insurance

Company Ltd. (SILICL) is a life insurance company in the private sector. Sahara Asset

Management Company Pvt. Ltd manages 16 equity and debt mutual funds. Sahara Banking

& Financial Services Fund has been adjudged the Best Performing Banking Sector Fund

over a three-year performance by the international agencies. SAHARA HOUSINGFINA

CORPORATION LIMITED: A National Housing Bank regulated & BSE listed company

targeting to meet the finance needs for housing all over the country. It serves its clientele

through attractive and competitive home loan schemes. In India, incremental disbursement is

around 2,00,000 Crore with a growth rate of around 15-20% .

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INTERNATIONAL HOTELS:

Grosvenor House – London- the Sahara India Pariwar purchased the hotel

from Royal Bank of Scotland for £470 million (4700 CR).

Plaza Hotel - New York-Acquired by Sahara in 2012-. The Plaza Hotel is

recognized as a Historic Hotel of America by the National Trust for Historic

Preservation.75% stake for $570 million from El Ad Properties. A $4 billion

price tag was placed on The Plaza stake.

Dream Hotel - New York- Acquired by Sahara in 2012.

MEDIA AND ENTERTANMENT:

The group owns a national Hindi News Channel Samay and 36 city specific regional news

channels Sahara Samay. It also owns Sahara One A General entertainment channel, Filmy-

A Hindi movie channel, and Firangi- An entertainment channel. Sahara Samay received the

"Broadcast Engineering Excellence Award" in 2008 for its network newsroom technology.

The group owns publishes and sells one magazine in English, 7 editions of Hindi Daily

Newspaper   Rashtriya Sahara , nine editions of Urdu Daily Newspaper   Roznama Rashtriya

Sahara   and one International Urdu Weekly,   Aalmi Sahara .

Sahara produces, markets, and distributes Hindi and other regional language films. Well

known films produced by the company include Bewafaa, Page-3, Sarkar, No

Entry,Wanted. In September 2010, the company was in talks to acquire MGM Studios, but

the deal collapsed. Sahara is willing to try again to take over MGM.

Indian conglomerate could offer up to $2 billion, source says 1 The diversified Indian

conglomerate recently surfaced as a potential bidder for MGM.

1 http://www.hollywoodreporter.com/news/-11:58 AM PST 09/29/2010 by Carl DiOrio

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REAL ESTATE-

Sahara India Real Estate Company and the Sahara Housing Investment Corporation, subsidiaries of the conglomerate, buy and develop land for residential housing projects across India. The company has projects in Kanpur, Lucknow, Gorakhpur, Hyderabad, Bhopal, Kochi, Gurgaon and Pune. Sahara has a collaboration with Turner Construction, an American building company, in some of its projects. Esteemed Customer Segments are Ultra High Networth Individuals (UHNIs), High Networth Individuals (HNIs) and Non Resident Indians (NRIs).Total Estimated Revenue of 15,00,000 Crores, Aamby Valley City is a township developed by the Sahara India Pariwar in Pune district.

SPORTS:

In badminton, it owns the Awadhe Warriors of Lucknow, one of six teams in

the Indian Badminton League.

In cricket, it owned the Pune Warriors India, a franchise team that played in

the Indian Premier League (IPL).

 Sahara owns the Formula One team Sahara Force India.

The company launched a polo team, the Sahara Warriors Polo Team in 2012.

From 2005 Calcutta Football League is also sponsored by Sahara.

In July 2012, Sahara India Praiser picked up the Lucknow franchise of the Hockey

India League (HIL), the Uttar Pradesh Wizards.

It is also the sponsor of the Bangladesh Cricket Team since 2012.

SUBROTO ROY

Subrata Roy was born in Araria in Bihar, India 1948 to Sudhir Chandra Roy and Srimati

Chhabi Roy. He studied at Holy Child School in Kolkata and later studied mechanical

engineering from Government Technical Institute, Gorakhpur. Roy started his first business

in Gorakhpur. He is the son of Smt. Chhavi & Late Shri Sudhir Chandra Roy. He is married

to Swapna Roy who is the Dy. Managing Worker (Personnel and welfare). He has 2 sons, Mr

Sushanto Roy who is the Executive Director and Chief Executive Officer of the Company

and Mr Seemanto Roy who is the Executive Director of the Company.

In the year 1978, he opened a small office in Gorakhpur (Uttar Pradesh). He started with

savings of Rs. 2000 and a Lambretta scooter. His office consisted of a table and two chairs

and a staff of one clerk and a runner boy. Initially he single handedly took up the business of

Deposits and Para - banking.

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In a span of just 29 years, the Sahara India Pariwar has grown from just 42 depositors in all

and a single establishment in the beginning to over 6.1 crore depositors through 1707

establishments, across the nation. He has created an empire of over Rs.50,000 crore which is

now recognized as one of the fastest growing business groups in the country.

He has been conferred the ITA – TV Icon of the Year (2007)He has received the Global

Leadership Award (2004), Sahara is said to have 29.6 million investors, representing about

8.5% of all households in India.

MAIN CONTENT

SAHARA INVESTOR FRUAD CASE

Sahara’s case is all about OFCD and its investor. OFCDs are optionally fully convertible

debentures. They are issued by the company to potential investors in order to raise money.

OFCD holders can become shareholders of the company if they choose to do so. Generally

(which is true in the case of Sahara) there is no asset marked against such investment. In

other words, they are unsecured in nature and in case of a default and liquidation of the

company, they will be one of the last stakeholders to be refunded.

In 2008, RBI debarred Sahara India Financial Corporation from raising fresh deposits.

The growth of Sahara’s empire was always a mystery; many believed it ran a Ponzi scheme

by collecting funds from investors. The group needed continuous flow of fresh funds to keep

it afloat. With RBI closing a door on the group from collecting deposits from the people, the

group needed a financial instrument that would be out of the purview of RBI but still get

access to public funds. Sahara decided to issue OFCDs by floating two companies – Sahara

India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC).

It was the Registrar of Companies (ROC) that needed to clear these investment vehicles.

ROCs role in the entire episode is critical since it cleared the proposal without raising the

most basic questions. Consider these facts- Both the companies had negligible net worth.

SIREC had an equity capital of only Rs 10 lakh and a negative net worth at the time of

issuance while the net worth of SHIC was around Rs 10 lakh.

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But both the companies planned to raise Rs 20,000 crore each. Imagine applying for a

bank loan of Rs 20,000 crore with only Rs 10 lakh as your contribution? A banker would

fall laughing on such a proposal, but ROC allowed the Sahara Group companies to go

ahead with the proposal. More than one law was flouted by Sahara in issuing these

OFCDs, which it calls private placement.

Firstly, the sheer size of the issue makes it a public issue. Any company seeking money from

more than 50 persons has to take the approval of SEBI in doing so, in which case the

company would have to make all the disclosures required as per SEBI norms. The Sahara

group had sought money from nearly 30 million investors. Apart from the size and number of

investors, another deliberate error was keeping the issue open ended; ideally such issues

should be closed within six weeks. In fact a Sahara group company kept an issue of Rs

17,250 crore open for 10 years.

Sahara’s money-making machine could have continued had it not committed another major

mistake. Sahara decided to tap the stock markets to raise money through Sahara Prime City.

In doing so the company had to file a Red Herring Prospectus and disclose working and

financials of other group companies. This is when K M Abraham spotted SIREC and SHIC

and found that the money raised through OFCDs was camouflaged as private placements.

Abraham (director of SEBI) found out that even though the Sahara group companies

collected money they did not have proper records of the identity of its investors. How and to

whom would they then return the money? Even professional agencies were unable to locate

the investors. The two companies, Abraham alleged, intended to rotate money between group

companies. Though the OFCD instruments were issued in the name of the two companies,

cheques were sought in the name of Sahara India. It was Abraham’s watertight investigation

in the entire Sahara OFCD issue that the case might see its logical end.

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EVENTS:

Nov 24, 2010 - | Sebi bars two Sahara cos, Subrata Roy from raising funds

Securities and Exchange Board of India (Sebi) has asked two entities of Sahara Group not to

mobilise funds from equity markets or from issuance of any security to the public while

restraining group supremo Subrata Roy from approaching public for raising money

Nov 26, 2010 | Sahara moves HC challenging Sebi ban on raising funds

A Sahara firm has moved the Allahabad High Court challenging market regulator the

Securities and Exchange Board of India's (Sebi) order barring some group entities and its

promoters, including Chairman Subrata Roy, from raising funds from public for non-

disclosure of information.

Jan 4, 2011 | Sebi approaches apex court in Sahara group case

Securities and Exchange Board of India (Sebi) has moved the Supreme Court against a high

court order staying the market regulator’s ban on a Sahara group company raising funds from

the public. Sebi’s petition is likely to be taken up by the apex court on January 5.

Jan 5, 2011 | Sahara can raise funds, but Sebi can seek details

The Supreme Court has declined to interfere in the dispute between the Securities and

Exchange Board of India (Sebi) and the Sahara group and has allowed the company to raise

funds from investors. It has, however, said that the market regulator can seek relevant

information from Sahara directly.

Jan 8, 2011 | Sebi warns investors of 2 Sahara companies

The Securities and Exchange Board of India (Sebi) has informed investors in optionally fully

convertible debentures (OFCDs) of two Sahara group companies that it would not be able to

provide redress to any investor on any complaint in connection with these instruments.

Jan 22, 2011 | Ministry examines Sebi charges against Sahara

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The corporate affairs ministry has started examining the charges levelled by the Securities

and Exchange Board of India (Sebi) against two Sahara group companies over fund raising

without proper approvals.

Apr 18, 2011 | Sebi moves apex court on Sahara

The Securities and Exchange Board of India (Sebi) has filed a caveat in the Supreme Court

claiming that any petition on its ongoing case against two Sahara group entities cannot be

decided without its knowledge.

May 10, 2011 | SC questions Sahara on fund-raising

The apex court has asked Sahara India Real Estate Corporation to produce before it on May

12 the proforma in which investors were asked to apply for debentures. A bench headed by

Chief Justice S H Kapadia also asked the corporation to produce the list of its agents

employed to raise money.

SC tells Sebi to probe Sahara scheme

Asking Sebi to proceed with its probe into Sahara group's Optionally Fully Convertible

Debentures (OFCD) scheme, the Supreme Court today said investors may not have any

knowledge about these products and might feel cheated like in the Harshad Mehta scam.

June 23, 2011 | Sebi asks Sahara to refund Rs 4,843 cr to investors

In the biggest refund order in its two-decade history, the Securities and Exchange Board of

India (Sebi) has directed two Sahara group companies to return at least Rs 4,843 crore

collected under their debenture schemes to investors. The two companies are Sahara

Commodity Services Corporation and Sahara Housing Investment Corporation.

June 25, 2011 | Sahara alleges media trial by Sebi

The Sahara group has criticised the Securities and Exchange Board of India (Sebi) for making

an order against two group companies public and accused the regulator of resorting to “a

media-trial in a sub judice case”. A Sebi official declined comment.

June 27, 2011 | Sahara moves SC against Sebi order for refund to investors

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The Supreme Court will hear on July 4 a Sahara group firm’s plea challenging a Sebi order

directing the company to return money collected from investors through a scheme along with

15 per cent interest.

July 08, 2011 | SC rejects Sahara plea over OFCD

The Supreme Court has declined the Sahara group's plea to issue a notice to the government

in on a dispute with market regulator Sebi. The Securities and Exchange Board of India had

directed the firm to return funds raised from investors under an optionally fully convertible

debentures (OFCD) scheme along with 15% interest.

Sept 08, 2011 | SAT asks Sahara to give details of OFCDs

The Securities Appellate Tribunal has asked two Sahara group firms to file an affidavit,

detailing their money raising activity. The tribunal said it wanted to know the total amount of

money raised, the process and the details of investors in the issues of optionally fully-

convertible debentures (OFCDs) done by the two companies — Sahara India Real Estate

Corp and Sahara Housing Investment Corp.

Oct 18, 2011 | SAT orders Sahara to refund Rs 24,029 cr in six weeks

The Securities Appellate Tribunal (SAT) has directed two Sahara group firms to refund a sum

of Rs 24,029 crore to 29.6 million investors who had subscribed to its optionally fully

convertible debentures (OFCD). The tribunal also gave a timeline of six weeks to the

companies to complete this unprecedented and massive refund operation.

Nov 11, 2011 | Sahara challenges SAT, Sebi order in SC

Two Sahara group companies, which were asked to refund about Rs 24,000 crore to investors

who had invested in optionally fully convertible debentures (OFCDs), have challenged the

Securities Appellate Tribunal (SAT) order in Supreme Court (SC).

Jan 10, 2012 | Aamby Valley gets Sahara OFCD money

Two Sahara group firms have invested a significant portion of the money raised through the

issue of Optionally Fully Convertible Debentures (OFCD) in Aamby Valley, a luxury

township project developed by the group in Maharashtra.

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Feb 12, 2012 | SC pulls up Sebi for leaking Sahara's proposal to media

The Supreme Court has pulled up market regulator Sebi for leaking to media details of the

proposal of Sahara Group's list of property sent to it as a guarantee to ensure that interest of

investors are protected.

Jun 05, 2012 | SC asks Sebi for list of Sahara-like cases

The Supreme Court has asked the market regulator, Securities and Exchange Board of India

(Sebi), to furnish details of unlisted firms which have raised capital from 50 or more people.

The court asked for the data while hearing an appeal by the Sahara group against an order by

Sebi, in the matter of issue of optionally fully-convertible debentures (OFCD) it issued to

over 22 million investors.

Aug 31, 2012 | SC upholds SAT order, Sahara to refund money

The Supreme Court upheld the Securities Appellate Tribunal (SAT) order directing two

Sahara group firms to refund over Rs 24,000 crore collected from investors through

optionally fully convertible debentures (OFCD).

Sept 12, 2012 | Sebi acting out of vengeance: Sahara

The Sahara Group has accused the Securities and Exchange Board of India (Sebi) of acting

in vengeance, after the capital market regulator failed to acknowledge a vehicle carrying

documents of its investors.

Oct 19, 2012 | Sebi duty bound to take action against Sahara: SC

Refusing to grant more time to the Sahara group of investment companies, the Supreme

Court has allowed the Securities and Exchange Board of India (Sebi) to take action against

the companies if they failed to provide details about some three crore investors from whom

the companies raised Rs 24,000 crore.

Oct 24, 2012 |   Sebi to outsource Rs 100-cr Sahara job

 The Securities and Exchange Board of India (Sebi) is eager to remove the burden of the

truckloads of investor database that Sahara has given on a Supreme Court order. The market

regulator has thus floated a multi-crore tender, under which it has invited registry and transfer

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agents (RTAs) who can handle data processing work for an estimated 300 million application

forms of nearly 30 million beneficiaries. The cost of such a project, say industry sources,

could come to around Rs 100 crore.

Nov 4, 2012 | Sebi seeks help from banks, KRAs to verify Sahara investors

Market regulator Sebi has decided to seek help from public sector banks and KYC

Registration Agencies (KRAs) for carrying out 'in-person verification' of about 3 crore

investors in the high-profile Sahara case.

Nov 25, 2012 | Sebi prosecution proceedings kick off against 2 Sahara firms

The Securities and Exchange Board of India (Sebi) has begun prosecution proceedings

against two Sahara companies and their top officials, while accusing them of failing to

provide documents related to 30 million investors as directed by a Supreme Court order.

Nov 28, 2012 | Sahara collecting consent letters from OFCD investors showing refunds

Several agents of Sahara India Parivar are collecting “sehmat patra” (consent letters) from

holders of optionally fully convertible debentures (OFCD), showing that the money has been

refunded to them.

Dec 20, 2012 | SAT dismisses Sahara appeal on extension of deadline

In another setback to Sahara, the Securities Appellate Tribunal (SAT) today rejected its

appeal seeking extension of time for submission of investor documents.

Jan 09, 2013 | SC dismisses Sahara firms' review petition

The Supreme Court has dismissed the review petition moved by two Sahara companies,

saying none of the grounds raised in it justify reconsideration of the August 31 judgment.

Feb 06, 2013 | Sebi free to seize properties of Sahara Group companies: SC

In fresh trouble to Sahara group, the Supreme Court today said that Sebi is free to freeze

accounts and seize properties of its two companies for defying court orders by not refunding

Rs 24,000 crore to investors.

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Feb 14, 2013 | Sebi cracks whip on Sahara

A week after the Supreme Court pulled up the market regulator for not taking action against

two Sahara group firms for defying the court’s August 2012 order directing refund of Rs

24,000 crore to investors, the Securities and Exchange Board of India (Sebi) has swung into

action.

Feb 27, 2013 | Sebi tightens noose around Sahara

The Securities and Board of India (Sebi) has written letters to around 2,000 entities,

including public and private sector banks, co-operative banks and mutual funds, to identify

assets belonging to the Sahara group and prevent their transfer.

March 15, 2013 | Sahara claims it paid Rs 700 cr TDS on interest payments

The Sahara group claimed that it has deposited taxes on the interest paid to investors with the

Income Tax Department.

Sebi seeks SC permission for arrest of Sahara chief

The Securities and Exchange Board of India (Sebi) moved the apex court, seeking the

detention of Subrata Roy Sahara, chairman of the Sahara Group, and directors Ravi Shankar

Dubey and Ashok Roy Choudhary.

March 19, 2013 | Despite Sebi glare, Sahara still raises funds

Even as the Securities and Exchange Board of India (Sebi) is considering how to return

funds to Sahara investors, Q Shop retail, Sahara Group’s latest venture, is raising funds from

its franchises by charging a stiff non-refundable fee of up to Rs 3 lakh, depending on the

classification of a town.

Apr 04, 2013 | Sebi is rich men's regulator: Sahara

Justifying its claims of over Rs 20,000 crore refunds made to investors in cash, Sahara group

hit back at Sebi and accused it of "being a "rich men's regulator that does not understand poor

investors"

Apr 10, 2013 | Sebi quizzes Sahara chief, seeks asset details

Market regulator Sebi questioned Sahara group chief Subrata Roy and three other top

executives about their assets and investments in connection with the high profile case

involving refund of an estimated Rs 24,000 crore to over three crore investors.

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On 26 February 2014, the Supreme Court of India ordered the arrest of Subrata Roy,

Chairman & Founder of Sahara India Pariwar, for failing to appear in connection with

the Rs.24,000-crore deposits his company has not refunded to its investors. He was

eventually arrested on 28 February 2014 by Uttar Pradesh police on a Supreme

Court's warrant, in a dispute with Market Regulator - SEBI. In a statement after the

arrest, his lawyer said Mr. Roy's 92-year-old mother was in poor health and needed

"her eldest son" by her side, and hence he failed to appear at the court. He was granted

interim bail by Supreme Court of India for the same on 26 March 2014 on condition

of depositing Rs 10,000 crore with the market regulator Sebi. As of August 2014, Roy

is still in jail and is trying to sale some of his hotel properties to enough money.

MAY19-2014-The Supreme Court ordered Sahara Group companies SIRECL and SHICL to

deposit Rs.10,000 crore of investors' money to secure the release of Sahara chief Subrata

Roy and two other directors in judicial custody.

AUGUST 1-2014-Subrata Roy allowed to negotiate property sales from Tihar

conference hall.

They will be allowed two secretarial staff and one technician, a mobile phone, two

computers, two laptops and stationery. Staff will be allowed in the conference room from

6am to 8pm on working days. All expenses are to be borne by the Sahara group.

SEPTEMBER-9-2014-SC relief to Sahara chief Subrata Roy, grants him 15 days more to

finalise hotel deals.

ROLE OF MEDIA AND MEDIA TRIAL

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Sahara alleges media trial by SEBI- 2

The Sahara group on Friday criticised the Securities and Exchange Board of India (Sebi) for

making an order against two group companies public and accused the regulator of resorting to

“a media-trial in a sub judice case”. A Sebi official declined comment. The matter is sub

judice and it is not appropriate for Sebi to go public by putting its order dated 23/06/2011

on its website and issuing a press note, in spite of the orders of the Supreme Court that the

order of Sebi will not be given effect to,” Sahara group spokesperson Abhijit Sarkar said in

a statement. “It was expected of Sebi to simply place the order before the Supreme Court

and maintain the sanctity of the (SC) order .”

“Sebi has been vindictive and malicious towards the Sahara Group and this has been apparent

from the chain of events since the last one and a half years. Such an act is really not expected

from such a responsible regulator institution. Of course it is not Sebi, it is by some wrong

people of Sebi.”The group said that as a responsible regulator, Sebi was meant for protecting

the interest of the investors but in its case, it is “continuously scaring” investors. The group

said investors’ interests were safe. Over 6.6 million people had invested in the bonds,

according to it. “Investors’ interest is absolutely protected by Sahara. Further, the matter is

still sub judice and there is no direction/order of the courts against Sahara,” the statement

said.

3 SC pulls up Sebi for leaking Sahara's proposal to media:

The Supreme Court has pulled up market regulator Sebi for leaking to media details of the

proposal of Sahara Group's list of property sent to it as a guarantee to ensure that interest of

investors are protected.

The apex court said it was "distressed" that the proposal sent by Sahara's counsel to the

advocate of Sebi has come on one of the TV channels and such incidents which have been

2 BS Reporter  |  Mumbai  -June 25, 2011

3 Press Trust of India  |  New Delhi  February 12, 2012 

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increasing day-by-day "not only affect the business sentiments but also interfere in the

administration of justice".

"We are distressed to note that even 'without prejudice' proposals sent by counsel for the

appellants (Sahara) to the counsel for Sebi has come on one of the TV channels.

"Such incidents are increasing by the day. Such reporting not only affect the business

sentiments but also interfere in the administration of justice," a bench headed by Chief

Justice S H Kapadia said.

Taking strong note of the incident, the bench said it would pass appropriate orders regarding

reporting of sub- judice matters."In the above circumstances, we have requested counsel on

both sides to make written application to this court so that appropriate orders could be passed

by this court with regard to reporting of matters, which are sub-judice," the bench, also

comprising justices A K Patnaik and Swatanter Kumar said.The leakage of the proposal was

brought to the notice of the court by Sahara's counsel and senior advocate Fali S Nariman,

who had sent it to the Sebi's counsel. Sahara's another counsel Kehav Mohan said the

proposal was about the Group's assets to the tune of Rs 35,000 crore as against the liability of

Rs 24,000 crore towards its investors.

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4 Tilting the balance SC's order on trial coverage is prone to

misuse- THE Supreme Court has ruled that if publishing news concerning a trial creates

“a real and substantial risk of prejudice to the proper administration of justice or to the

fairness of trial”, the court could allow a postponement of its publication through an

appropriate order. The order was passed on complaints that had alleged breach of

confidentiality during the hearings of a dispute between the Sahara group and stock market

regulator Securities and Exchange Board of India, when some documents pertaining to the

case were leaked to the media. The 56-page judgment, coming from a bench headed by Chief

Justice S H Kapadia, is likely to be interpreted in different ways.

That the apex court refrained from framing guidelines on how the media should report on

court trials is welcome, since any such directive could have had an adverse impact on the

freedom of the media. That the order allows an aggrieved or accused party to move a high

court or the Supreme Court with a plea for restraining publication of news on a case under

trial could be seen as only a reiteration of well-established principles of law and justice. Even

earlier and in the normal course of things, anyone with a genuine grievance that publication

of news on a trial could result in miscarriage of justice could move any court of law pleading

for remedial measures. In spite of that, however, no significant court intervention so far has

effectively put a blanket ban on the reportage of court cases under trial. But what Tuesday’s

judgment has done is to tilt the balance in favour of litigants seeking court interventions —

which might well result in the imposition of such gag orders on the media. To that extent, the

apex court’s order is prone to misuse.

4 Business Standard  |  New Delhi  September 13, 2012

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Indeed, the danger arising out of such misuse lies elsewhere. Of late, India has been

witnessing the unravelling of a large number of corruption scandals that have shaken the

people’s faith and confidence in the government’s ability to run a clean administration. The

2G spectrum scam case is already being heard in the courts and the ongoing coal block

allocation scandal too will go the same way. A beleaguered government will be desperate to

prevent further political embarrassment arising out of these corruption scandals and may be

encouraged to use the Supreme Court order to seek a stay on the coverage of the daily court

hearings on these cases. Similarly, companies accused of wrongdoing may be emboldened to

seek relief from the courts.

Even when such petitions are not granted, the legal process itself is certain to cast an adverse

impact on the freedom of the media and undermine the people’s right to know about such

cases before the court. Instead of paving the way for such curbs, it would perhaps make more

sense if the courts took upon themselves the responsibility of allowing independent and

comprehensive electronic coverage of court cases that both the people and the media can

freely access for information or reportage. That would be a more effective way of ensuring

that the coverage of court proceedings does not create the risk of prejudice to the proper

administration of justice or to the fairness of trials.

5 Let's fight it out on TV, Sahara challenges Sebi-

A signed full-page advertisement in the newspapers on Sunday invited the Securities and Exchange Board of India to a live debate on television-

“I hereby challenge and invite the Chairman or/and Members or/and Executive Directors

of Sebi for a live debate with me on a TV channel and let people know their wrong intent

and deed, as a corporate regulator and clearly understand what extreme degree of injustice

is being done by them to malign the image of Sahara India Pariwar,” said the

advertisement entitled ‘Enough is Enough.’

5 Sachin P Mampatta  |  Mumbai  -March 16, 2013

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It futher asks for a 10-day notice to organize the appropriate channel and 60 minutes of air-

time to facilitate the debate. Subrata Roy Sahara would represent his group in the discussion,

‘to expose the truth,’ claimed the advert. The advertisement also noted that he had written

thrice to the chairman of Sebi seeking an appointment, but without any luck. BN Agarwal, a

former judge of the Supreme Court who is overseeing the refund, also refused to meet with

Sahara group officials, said the advertisement. The advertisement further accused Sebi of

malafide acts and of acting under the diktats of ‘powerful third parties.’

PRESENT CASE STATUS-

The case is still pending in the Supreme Court of India –Mr. Subroto Roy is allowed to work

from Tihar jail (Delhi). Currently he is negotiating to sell three Sahara hotels abroad to

furnish a bail of rs 10,000 crore as ordered by SC.

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BIBLIOGRAPHY:

NEWSPAPERS

1. Business standard

2. Economic times

3. Times of india

4. Indian express

5. The hindu

6. Dna

7. Live mint

WEBSITES :

1. moneybhai.moneycontrol.com

2. http://in.reuters.com

3. www. sahara indiapariwar .

4. www.firstpost.com

5. timesofindia.indiatimes.com

6. ww.the hindu .com

7. economictimes .india times .com

8. www.business-standard.com

9. www.hollywoodreporter.com

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