Sahara firms' bank accounts frozen by Indian regulator

The regulator has also ordered the attachment of properties belonging to Subroto Roy Sahara

Bank accounts of two firms of Sahara, one of India's biggest business houses, have been frozen for failing to refund money to millions of investors.

The firms had raised nearly 240bn rupees ($4.5bn; £3bn) through bonds that were later found to be illegal.

India's market regulator said they had failed to refund the money despite an order by India's Supreme Court.

However, Sahara said its liability was much less and that it had deposited as adequate amount with the regulator.

Sahara began raising the money four years ago from nearly 22 million small investors, many of them in rural India.

However, in August last year, it was ordered to refund the money in 90 days, with 15% interest, for failing to comply with financial regulations.

In December, the Supreme Court gave the firms more time to repay the money.

They were asked to initially deposit 51.2bn rupees with India's capital markets regulator, the Securities and Exchange Board of India (SEBI). The remaining money was to be paid in two instalments by February.

On Wednesday, Sahara said that it believed that its liability was unlikely to exceed the 51.2bn rupees it had already deposited with SEBI.

The group said in a statement that the regulator's order was based on "old facts and details".

Meanwhile, SEBI also ordered the attachment of the firms' properties as well as those of top executives, including the flamboyant Chairman Subroto Roy Sahara.

Mr Sahara has a rags-to-riches story and is a household name in India.

The Sahara Group has businesses ranging from finance, housing, manufacturing and the media. It also has interests overseas and recently bought a controlling stake in New York's landmark Plaza Hotel.

Sahara also sponsors the Indian hockey team and owns a stake in Formula One racing team, Force India.