Sahara chief Subrata Roy faces RBI turbulence in bailout

Sahara hurtled into further trouble on Friday with the Reserve Bank of India (RBI) moving the Supreme Court (SC) to stop the Group from selling assets to raise Rs 10,000 crore required for securing bail of chairman Subrata Roy.

The RBI in an application sought modification of the order allowing the Group to sell its assets for generating funds.

The Central bank asked the apex court to restrain Sahara India Financial Corporation Limited (SIFCL) from utilising any of its assets, including securities, for paying dues to the Securities and Exchange Board of India (Sebi) on grounds that SIFCL is a residuary non-banking financial firm and falls under its (RBI) regulatory control.

The RBI, in its plea, said, "... this court may be pleased to modify the order dated June 4, 2014, and pass an order restraining the respondents/non-applicants, including the company, from utilising any of the assets of SIFCL, including the securities, which are maintained by the company under paragraph 6 of the RNBC Directions for the purpose of paying into SEBI-Sahara Refund Account."

The RBI also sought a direction to credit to an escrow account with any nationalised bank if any amount already deposited in the SEBI-Sahara Refund Account or account of the partnership firm Sahara India or any other Group derived out of the assets of M/s SIFCL.

The Central bank said that it is necessary to ensure that funds of the company are utilised for the purpose of repayment to the depositors and are not being diverted on the pretext of complying with the directions of the apex court.

The plea added that the RBI had carried out the inspection of the company at annual intervals under RBI Act and it was noticed that the deposit-taking activity of SIFCL were not in conformity with prudent practices and its directions were being violated.

The plea has also sought direction to SIFCL to disclose the details of its assets and aggregate liability to depositors of the company as on December 31, 2014.

The SC on June 4, 2014, modified its one of its earlier 2013 order to the extent of permitting alienation of the securities and assets of the Group companies of Sahara for the purpose of making payments under its directions.