The death of Sahara Group’s chief, Subrata Roy, has brought attention back to the undistributed funds of over Rs 25,000 crore that are currently with the Securities and Exchange Board of India (SEBI). Subrata Roy passed away in Mumbai at the age of 75 after a prolonged illness. Throughout his career, he faced numerous regulatory and legal battles related to his group firms, which were accused of engaging in Ponzi schemes and bypassing regulations, although the group consistently denied these allegations.
In 2011, SEBI ordered two Sahara Group firms, Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL), to refund the money raised through Optionally Fully Convertible Bonds (OFCDs) to nearly three crore investors. SEBI ruled that the funds were raised in violation of its rules and regulations. After a series of appeals, the Supreme Court upheld SEBI’s directions in August 2012, instructing the two firms to refund the money collected from investors with 15% interest.
As a result, Sahara was required to deposit an estimated Rs 24,000 crore with SEBI for further refund to investors, even though the group claimed to have already refunded over 95% of the investors directly. The amount deposited in bank accounts for the repayment has now exceeded Rs 25,000 crore.
However, due to a lack of claims from the majority of bondholders, SEBI has only refunded an additional Rs 7 lakh during the last fiscal year, while the balance in the SEBI-Sahara refund accounts increased by Rs 1,087 crore. According to SEBI’s annual report, as of March 31, 2023, there were 19,650 applications involving 53,687 accounts. Refunds have been made for 17,526 applications involving 48,326 accounts, totaling Rs 138.07 crore.
SEBI also stated that it has recovered an aggregate amount of Rs 15,646.68 crore as of March 31, 2023, under various orders passed by the Supreme Court and attachment orders passed by the regulator. This amount, along with the accrued interest, has been deposited in nationalized banks in accordance with the Supreme Court’s judgment dated August 31, 2012. As of March 31, 2023, the total amount deposited in nationalized banks is approximately Rs 25,163 crore.
In August, the government initiated the process of refunding Rs 5,000 crore to depositors whose funds are stuck in four cooperative societies of Sahara Group. Cooperation Minister Amit Shah launched the ‘CRCS-Sahara Refund Portal’ in July to facilitate the return of the money to investors, and around 18 lakh depositors have registered on the portal. The government aims to return the money to 10 crore investors of the four cooperative societies within 9 months, in compliance with a Supreme Court order to transfer Rs 5,000 crore from the Sahara-Sebi refund account to the Central Registrar of Cooperative Societies (CRCS).
(Note: This news article has been rewritten and edited, but the information remains unchanged from the original source.)
