Sahara claims interest due only till Dec '12

Regulator had found that there were irregularities in manner that group raised money from investors through issue of OFCD

In a recent communication to the market regulator, the Sahara group has maintained that it owes interest only till the end of last year on amounts due to investors.

“…kindly note that our liability to pay interest on the said amount to the investors shall be limited till December 5, 2012, the day when we had deposited the amount of Rs 5,120 crore (which also includes the interest amount) with Sebi (Securities and Exchange Board of India),” it said in a letter to the regulator dated July 22.

It said so in a reply to a Sebi query if a list of 36 investors had been refunded.

An email sent to the regulator did not immediately receive a reply.

“What we have stated is that liability of further interest after December 5, 2012, shall not fall on Sahara, since Sahara paid Rs 5,120 crore to Sebi for refund to investors but Sebi has not discharged its obligations and committed enormous delay in  making refund to the investors,” said the Sahara group. It declined to put a figure on the outstanding interest.

The regulator had found  irregularities in the manner that the group raised money from investors through the issue of an instrument called an Optionally Fully Convertible Debenture (OFCD).  

The regulator’s view was upheld by the Supreme Court, which asked it to return money to investors with 15 per cent interest.

Sahara subsequently deposited a sum of Rs 5,120 crore and claimed that the remainder of around Rs 20,000 crore had already been given back to investors.

Authorities maintained that there was insufficient documentary evidence to establish that such a refund had taken place.

Sebi has also reportedly had trouble establishing the genuineness of investors.

The regulator has only been able to establish refunds for a limited number of investors so far, an amount in lakhs, according to one report. This suggests that interest at 15 per cent for the remaining amount which is in excess of Rs 2,000 crore would be nearly Rs 300 crore since the December order.

The regulator contests Sahara’s claims of having refunded over Rs 20,000 crore to investors, which could put the interest amounts due even higher.

Interest Payments In Dispute:

Sahara claims it refunded Rs 20,000 crore to investors, a fact Sebi has questioned

Claims only around Rs 2,610 crore outstanding

Now, Sahara says only obliged to pay interest till Dec 2012

Sebi said to have been able to establish identity of only limited number of investors for repayments since then

Interest payments even on Rs.2600 crores runs into hundreds of crores