(Adds Sahara comments in paragraphs 4, 5 and 11)
Feb 13 (Reuters) - India's capital markets regulator ordered
a freeze on the assets and bank accounts of two Sahara Group
companies, saying they failed to heed a Supreme Court order to
repay billions of dollars collected from investors in outlawed
The orders posted late on Wednesday by the Securities and
Exchange Board of India (SEBI) escalated a battle between the
regulator and unlisted Sahara, one of India's biggest business
groups and a household name in the country through its
sponsorship of the national cricket team.
SEBI also ordered a freeze on all bank accounts and
properties in the name of the Sahara Group founder, Subrata Roy,
and three other directors of the two firms, according to two
separate orders posted on the regulator's website.
Sahara said in a statement that its total liability was
unlikely to exceed the 51.2 billion rupees ($950 million) it had
deposited with the regulator.
It also said it had appealed the Supreme Court's December
order to deposit additional money with the regulator and that a
hearing is likely next week.
Sahara owns the Grosvenor House hotel in London, and last
year struck a deal to buy the Plaza Hotel in New York.
The group was ordered in August to repay sums raised by what
the court called "dubious" means from nearly 30 million small
investors, with 15 percent interest a year.
The two Sahara firms raised a total of 257.8 billion rupees
in the outlawed bonds as of April 2011, according to Sahara
court affidavits cited by SEBI.
In December the court ordered Sahara to pay an initial
deposit of 51.2 billion rupees with SEBI, pay another 100
billion rupees in the first week of January and the remainder in
the first week of February.
The companies have said that only 26.2 billion rupees
remains to be refunded as they have repaid the remainder, SEBI
said, an assertion the regulator disputes.
Sahara said in its statement that the SEBI order did not
take into account redemptions it has made since January 2012.
The SEBI statement said its order would be implemented with
immediate effect and that India's central bank and the finance
ministry's Enforcement Directorate would be informed about the
The two Sahara group companies were asked to give details of
any investment other than those mentioned in the order within 21
days, according to the order on the regulator's website.
(Reporting by Devidutta Tripathy in NEW DELHI and Sumeet
Chatterjee in MUMBAI; Editing by Tony Munroe and Jane Baird)