Supreme Court questions Sahara Group on diversion of funds

Facing tough times in its attempt to get its Chief Subrata Roy out of jail, Sahara Group on Tuesday landed in a soup again as the Supreme Court asked it to explain how it encashed securities, deposited with RBI, and diverted them to pay depositors to the tune of Rs 484 crore without the court's nod.

The apex court also allowed Reserve Bank of India (RBI) to initiate action against Sahara India Financial Corporation Ltd (SIFCL), a non-banking financial firm, for allegedly breaching the central bank norms by encashing securities and diverting them to Sahara India, a partnership firm, for paying the depositors instead of depositing the amount in the SEBI-Sahara refund account as directed by it.

A bench headed by Justice T S Thakur, which restrained the Group from further alienating and transferring remaining directed securities of SIFCL, sought a response as to how they diverted the money to the tune of Rs 484.67 crore despite a specific direction against it by the court on July 4, 2014.

"We never allowed you to encash the securities and to pay the amount to the depositors. Rather, you should have deposited them into the SEBI-Sahara account," the bench, also comprising justices A R Dave and A K Sikri, said.