The recent passing of Sahara Group’s chief, Subrata Roy, has refocused attention on investors still in the process of claiming their money from the cooperative societies of the Sahara Group. Undistributed funds worth over Rs 25,000 crore with the Securities and Exchange Board of India (SEBI) have come back into the limelight.
Roy who passed away at the age of 75 after battling a prolonged illness leaves behind a legacy passed by multiple regulatory and legal battles. His group faced accusations of circumventing regulations with Ponzi schemes, which the Sahara Group consistently denied. In 2011, SEBI ordered two Sahara Group firms – Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL) – to refund money raised from nearly 3 crore investors through Optionally Fully Convertible Bonds (OFCDs).
After a prolonged legal process, the Supreme Court on August 31, 2012, upheld SEBI’s directions, requiring the two firms to refund the money collected from investors with 15 per cent interest. Sahara was directed to deposit an estimated Rs 24,000 crore with Sebi for further refund to investors.
After a prolonged legal process, the Supreme Court on August 31, 2012, upheld SEBI’s directions, requiring the two firms to refund the money collected from investors with 15 per cent interest. Sahara was directed to deposit an estimated Rs 24,000 crore with Sebi for further refund to investors.
In the absence of claims from a majority of bondholders of the two Sahara companies, the total amount refunded by SEBI increased modestly by about Rs 7 lakh during the last fiscal year (2022-23). However, the balance in SEBI-Sahara refund accounts rose by Rs 1,087 crore during the year.
As of March 31, 2023, SEBI received 19,650 applications involving 53,687 accounts. Refunds have been made concerning 17,526 applications involving 48,326 accounts for an aggregate amount of Rs 138.07 crore, including an interest amount of Rs 67.98 crore.
Cooperation Minister Amit Shah launched the ‘CRCS-Sahara Refund Portal’ in July to facilitate the return of money to investors, with around 18 lakh depositors registered on the portal. In March, the government announced the intention to return money to 10 crore investors of the four cooperative societies within nine months, following a Supreme Court order directing the transfer of Rs 5,000 crore from the Sahara-SEBI refund account to the Central Registrar of Cooperative Societies (CRCS).
According to sources from the Ministry of Cooperation, over 18 lakh people had applied for claims on the portal by August. The first payment, up to Rs. 10,000, for depositors with Rs 10,000 or more, will be made through the portal launched in July. Some applications were closed due to their records not being traceable in the data provided by two Sahara Group firms.
Under various orders passed by the Supreme Court and attachment orders by the regulator, SEBI has recovered an aggregate amount of Rs 15,646.68 crore as of March 31, 2023.
This recovered amount, along with accrued interest after due refunds to eligible bondholders, was deposited in nationalized banks. As of March 31, 2023, the total amount deposited in nationalized banks is around Rs 25,163 crore, reflecting a steady increase from Rs 24,076 crore, Rs 23,191 crore, and Rs 21,770.70 crore as of March 31, 2022, March 31, 2021, and March 31, 2020, respectively.
The government’s concerted efforts, including the initiation of refund processes and the implementation of the CRCS-Sahara Refund Portal, underscore the complex and ongoing journey towards justice for investors entangled in Sahara’s financial complexities.
