India’s top court today set a 100-billion-rupee ($1.66 billion) bail for Subrata Roy, owner of the financial services group Sahara India Pariwar, who has been in police custody for almost a month.
Sahara will have to provide 50 billion rupees in cash and another 50 billion rupees in bank guarantees for Roy, 65, to be released, a two-judge panel at the nation’s Supreme Court in New Delhi said.
Roy’s bail conditions are the latest development in a three-year dispute with the Securities and Exchange Board of India, which has faulted two Sahara companies for selling a convertible debt instrument without its approval. Roy is seeking to convince the court that Sahara has complied with an order to refund 240 billion rupees that it raised from 30 million depositors.
A call today to the mobile phone of Sahara spokesman Abhijit Sarkar wasn’t answered.
Sahara’s lawyers proposed yesterday to repay 200 billion rupees within a year in five installments by selling real estate assets. The proposal included a 25-billion-rupee repayment in three days, 35 billion rupees in three installments and 70 billion rupees as a fifth installment.
The top court put Roy and two Sahara directors into custody after the shadow financier surrendered to police on Feb. 28. The surrender came two days after the court issued a non-bailable arrest warrant for him after he failed to heed a summons. Roy cited the need to be at his ailing mother’s bedside for his absence.
Roy’s companies have said that 31,675 cartons of documents in 128 truckloads it has sent to Sebi prove it has repaid the money. Lawyers for the market watchdog have told the court the refunds to depositors are unverifiable since the paper trails often lead nowhere.
The financier, who calls himself “Sahara Sri” and started out in 1978 collecting deposits from doorsteps, is part of the $670 billion shadow banking industry in Asia’s third-largest economy.
Over the past 35 years, Roy has built an empire that at the end of 2012 was valued at $11 billion by collecting amounts as small as 32 cents every day from rickshaw pullers, laundry washers and tire repairmen.
Sahara owns properties such as New York’s Plaza Hotel, London’s Grosvenor House and at least 120 companies, including television stations, a hospital, a dairy farm, retail shops selling products from detergents to diamonds and a stake in India’s only Formula One racing team. It also owns 14,600 hectares (36,000 acres) of land, an area the size of Liechtenstein.