India's top court has ordered the arrest of the head of the giant Sahara business group for failing to appear in a case involving repayment of billions of dollars illegally collected from small investors.

The Supreme Court issued the order after Subrata Roy's lawyer said on Wednesday that the billionaire could not appear because his elderly mother was ill.

"The arms of this court are very long. We can get him, we are issuing a warrant against him," said Judge K S Radhakrishnan, rejecting the lawyer's argument and ordering Roy to appear on March 4.

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On Tuesday the court rejected Roy's request for an exemption from appearing in person over delays in repaying money collected from rural savers through bond sales.

Sahara, a famous name in India through its former sponsorship of the national cricket team, raised around 200 billion rupees ($3.2 billion) from millions of savers in a process judged by authorities in 2012 to be against the law.

The court then ordered the group to hand over money to the Securities and Exchange Board of India (Sebi), the securities regulator, which is overseeing the repayment process.

Accounts frozen

In February last year Sebi ordered the bank accounts of two of Sahara's companies to be frozen.

During the hearing on Tuesday, the court said Sebi could go ahead with sales of Sahara properties to recover some of the money.

It added that Roy and three other directors must comply with its orders to appear.

In 2008 Sahara shut its operations as India's biggest non-bank deposit-taking firm on the orders of the court, which was worried about the soundness of the investments in which the money was being parked.

Observers say much of Sahara's fundraising success rested on the fact that vast numbers of Indians in rural areas have no access to banks and no other place to put their money than in poorly regulated non-bank institutions.

There was no immediate comment from Sahara or Roy on the court's order.

Source: Agencies