SEBI issued a bailable warrant against Sahara India Parivar founder Subrata Roy

A Securities and Exchange Board of India (SEBI) issued a bailable warrant against Sahara India Parivar founder Subrata Roy on September 6.

Roy was scheduled to appear before Special Judge VS Gaike in a 2014 case filed by SEBI against Sahara Housing Investment Corporation Ltd. (SHICL), Sahara India Real Estate Corporation Ltd. (SIRECL) and others.

However, Counsel appearing for Roy applied for exemption on the ground of his medical condition post-COVID-19 infection. The medical certificate issued by Sahara Hospital, Lucknow stated that he suffered from type 2 diabetes and hypertension.

Counsel appearing for SEBI  opposed Roy's application, stating that he had agreed to remain in court after the discharge application was rejected and that COVID-19's post-effects last for only 3-4 days after the event.

The special court noted in 2017, that the Bombay High Court directed Roy to appear in court on all dates following the disposition of his discharge application. In defiance of the High Court's directions, Roy had not appeared after 2019 and, therefore, his application for exemption was rejected. In addition, SEBI's counsel requested that a bailable warrant be issued against Roy for $2,500.

According to the allegations, a special resolution was passed to raise funds through the issuance of unsecured Optionally Fully Convertible Debentures (OFCDs) through a private placement of associates, friends, workers, group companies, and others affiliated with the Sahara Group of Companies.

According to the Red Herring Prospectus, the OFCDs would not be listed on any recognized stock market.

According to SEBI, SIRECL received approximately Rs 6,380 crore from over 75 lakh investors between 2009 and 2011. In comparison, SHICL received around ₹19,400 crores from nearly two crore investors between 2008 and 2011.

An OFCD-based public offering was allegedly conducted by the business under the guise of a private placement. According to SEBI, several complaints were received regarding the company's failure to disclose its Red Herring Prospectus.