Sebi is rich men's regulator, says Sahara

Yesterday, Sebi chief UK Sinha had taken a dig at the company for claiming that it had returned Rs 20,000 cr to its investors, with over 90% in cash

Justifying its claims of over Rs 20,000 crore refunds made to investors in cash, Sahara group today hit back at Sebi and accused it of "being a "rich men's regulator that does not understand poor investors".

Giving a break-up of its investor base in the high profile case, the company said that the total investor base of 3.07 crore included as much as 2.99 crore with funds accounting for up to Rs 20,000 each and cash repayments having been made to around 90 per cent of the investors was totally justified.

Sahara claimed that there were 1.33 crore investors with funds of up to Rs 5,000 each, some 0.88 crore for up to Rs 10,000 each, another 0.42 crore for up to Rs 15,000 each and further 0.36 crore for up to Rs 20,000 each.

Without naming Sahara group, Sebi Chief U K Sinha yesterday said at a seminar that a company has claimed to have returned more than Rs 20,000 crore to investors, with over 90 per cent in cash, and asked the people to "ponder over it and think how feasible, how credible this story could be".

Reacting to Sinha's statement, Sahara said in a statement that "rich men's Sebi does not understand, recognise poor investors". The Sebi chief should not "give irresponsible statements that how and why Rs 20,000 crore repayments were made in four months and 90 per cent was paid in cash," it said.

Sahara was asked last year by the Supreme Court to refund more than Rs 24,000 crore to over three crore bondholders, while Sebi was asked to facilitate the refund after verifying the genuineness of investors.

However, the group has claimed that it has made a bulk of the refund and its total outstanding liability towards repayment to investors is less than Rs 5,120 crore given to Sebi for the refund purpose.

In its statement, Sahara today further said that Sebi Chairman was neither giving time to meet its Chairman for past one year, nor he has accepted the invitation for a TV debate".

"Repeatedly we have written to SEBI and everywhere that our investors are very small and mostly living in small townships and rural areas. These investors do not go to Banks and Banks do not come to them," it said, while justifying the cash refund.

Demanding an apology from Sebi Chairman, Sahara group said that the repayments of up to Rs 20,000 in cash was well within law of the country and there were no fake or fictitious investors on its books.

It further clarified that the majority of refund has been made in a time period of more than five months.

Sahara said that it had to deal with a big rush with demands for repayments for "no fault" of it, as the OFCD (Optionally Fully Convertible Bonds, a kind of bonds through which Sahara firms had raised the money from public) was launched after "all valid permissions in writing from Central Government through Ministry of Corporate Affairs".