* Court rules that Roy, others be held until March 11
* Roy was arrested on Friday for missing hearing last week
* Court: Sahara failed to comply with repayment order in
(Updates after hearing, adds details from court order)
By Suchitra Mohanty and Devidutta Tripathy
NEW DELHI, March 4 India's highest court on
Tuesday directed that the head of the Sahara conglomerate,
Subrata Roy, remain in custody over the group's failure to
comply with its orders to repay investors in an outlawed
multi-billion-dollar investment scheme.
Roy, 65, was arrested on Friday after he did not appear last
week at a Supreme Court hearing - which he says he missed to
attend to his ailing mother - in its long-running battle with
India's securities regulator.
Sahara is best known as the former main sponsor of India's
national cricket team, as well as owner of New York's Plaza
Hotel and London's Grosvenor House. It has a net worth of $11
billion and more than 36,000 acres of real estate, according to
"Non-compliance of the orders passed by this Court shakes
the very foundation of our judicial system and undermines the
rule of law," the court said, ordering that Roy and two other
directors be held until the next hearing on March 11.
The court said the next appearance could be brought forward
if an acceptable proposal is offered.
Sahara did not have immediate comment after the hearing.
Roy is prone to public shows of patriotism and full-page
newspaper ads defending Sahara against the authorities. He is
often photographed with Bollywood stars and cricketers.
He was driven the roughly 500 km from Lucknow to appear on
Tuesday at the court in New Delhi. When Roy arrived, a man threw
ink on his face and was taken away by police.
The Securities and Exchange Board of India (SEBI) brought
contempt proceedings against Sahara for failure to comply with a
2012 court order to repay billions of dollars to investors.
Sahara has said it repaid most investors and that its
remaining liability was less than the 51.2 billion rupees ($826
million) it deposited with SEBI.
The Supreme Court on Tuesday questioned the veracity of
investor documents provided by Sahara.
"Documents and affidavits produced by the contemnors
themselves would apparently falsify their refund theory and cast
serious doubts about the existence of the so-called investors,"
"All the fact finding authorities have opined that majority
of investors do not exist," the court said in its order.
Sahara had offered to give SEBI title deeds of properties it
said were worth 200 billion rupees as security, but the
regulator has said the properties were far over-valued.
Sahara's core business includes selling financial products,
largely to small investors in towns and rural areas. It was two
such products, later ruled illegal, that drew SEBI's attention.
Critics, including activist groups, argue Sahara's
investment products are designed to evade regulatory oversight
and that it lacks transparency on the source and use of funds.
Police went looking for Roy on Thursday at his sprawling
Sahara Shaher estate in the northern city of Lucknow. He turned
himself in on Friday and denied he had been "absconding," saying
he was meeting doctors over the condition of his 92-year-old
mother, as well as a lawyer, and was taken to a government guest
house on the outskirts of Lucknow.
Roy started out from the city of Gorakhpur in the
hardscrabble east of Uttar Pradesh state and styles himself a
man of the people, though he makes a show of opulent living.
Like many Indian business leaders, he is perceived to be
close to politicians.
He is often described in the media as a billionaire, but
last year said his assets were less than $1 million.
His titles at Sahara are chairman and managing worker, and
he refers to himself as "guardian of the world's largest family"
of more than one million employees and agents.
($1 = 61.9800 Indian rupees)
(Additional reporting by Himank Sharma in MUMBAI; Writing and
additional reporting by Tony Munroe in MUMBAI; Editing by