India Tycoon Asked to Pay $8.4 Billion to Stay Out of Jail
(Bloomberg) -- India’s market regulator has petitioned the Supreme Court to direct tycoon Subrata Roy to immediately pay 626 billion rupees ($8.4 billion) meant for poor investors, or cancel his parole.
The Securities and Exchange Board of India said the outstanding liability of the Sahara India Parivar group’s two companies and the conglomerate’s chief Roy stand at 626 billion rupees, including interest, according to court filings seen by Bloomberg. Roy’s liabilities have ballooned from 257 billion rupees he was ordered to pay eight years ago.
India’s Supreme Court in 2012 ruled that Sahara group companies violated securities laws and illegally raised over $3.5 billion. The companies said monies were raised in cash from millions of Indians who could not avail banking facilities. Sebi could not trace the investors and when Sahara firms failed to pay up, the court sent Roy to jail.
“It is absolutely wrong demand by Sebi,” Sahara group said in an emailed statement on Thursday. Sebi has “mischievously” added 15% interest and it is a case of double payment as the companies have already paid back the investors, according to the statement.
Roy’s case, which featured in Netflix series Bad Boy Billionaires, is among stories of fallen business tycoons in Asia’s third-largest economy and India’s efforts to go after the rich and famous who failed to pay their dues. Roy, who at different times owned an airline, formula one team, cricket team, plush hotels in London and New York, and financial companies, stayed in jail for over two years and is currently out on parole since 2016.
“The Sahara story, almost a decade after the final judgment, is far from over,” said Abhiroop Lahiri, partner at IndusLaw. “Through its current petition, the regulator has clearly indicated it does not intend to go gentle on the resolution of a long-standing and infamous securities markets issue.”
Roy has so far deposited over 150 billion rupees, Sebi said in the court filing, while the Sahara group said it has deposited 220 billion rupees. The court has not yet decided when the case will be heard next.
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