Supreme Court Appoints High Powered Sale Committee To Address Investor Claims Against Sai Group Of Companies

Supreme Court Appoints High Powered Sale Committee To Address Investor Claims Against Sai Group Of Companies

In a significant move to address investor claims against the Sai Group of Companies, the Supreme Court recently invoked its power under Article 142 of the Constitution to appoint a High Powered Sale Committee (HPSC). The committee, chaired by former Supreme Court Judge Justice S. Ravindra Bhatt, has been tasked with overseeing the liquidation of assets related to the case. Additionally, the Court granted interim bail to two founder-directors of the companies, considering their lengthy incarceration of over eight years.

The ruling, delivered by Justices Surya Kant and K.V. Viswanathan, responded to a writ petition filed by the accused, who sought a directive for the Securities and Exchange Board of India (SEBI) to expedite the liquidation of their attached assets and distribute the proceeds to genuine investors promptly.

Due to the petitioners' intention to refund investors but the lack of infrastructure for public auctions by the involved agencies, the Court deemed it necessary to exercise its constitutional powers to ensure justice. The Court highlighted the prolonged wait of innocent investors for their refunds, some of whom have been waiting for over a decade.

The HPSC, appointed by the Court, includes:

a) Justice S. Ravindra Bhatt, Former Judge, Supreme Court (Chairperson)

b) Dr. Justice Satish Chandra, Former Judge, High Court of Allahabad (Member)

c) A SEBI nominee, preferably an officer of director rank (Member),

d) Pardeep Kumar Sharma, Registrar (Retd.), Supreme Court (Member Secretary-cum-Nodal Officer)

e) And other members.

The Court's judgment details the procedure for asset auctions, the management of sale proceeds in a dedicated account, and the process for refunding investors. It also outlines the responsibilities of the involved parties, administrative requirements, and compensation for the committee members.

In a special consideration, the Court granted interim bail to two petitioners who had been under trial for over eight years, with one already on bail. The petitioners, a family consisting of a father, mother, and son, had established several companies under the Sai Group. Allegations of illegal fund mobilization led to complaints to SEBI, which imposed penalties and initiated recovery proceedings for over ₹305 crores. All immovable properties and jewelry owned by the petitioners' companies were attached.

Following multiple FIRs across various states, the petitioners faced significant legal challenges. While two of the petitioners remained in custody, the son was released on bail by the Chhattisgarh High Court in 2023. In April 2024, a directive was issued to prevent his arrest in any new cases related to these issues until further orders.