In the late 1990’s Tamil hit Arunachalam, Rajnikanth playing the eponymous hero, is faced with an interesting predicament. His father, also played by Rajnikanth, leaves behind immense wealth. But in his will, he says, the son would have to prove his worth before inheriting it. For this, the son has to spend Rs 30 crore in 30 days. There are conditions like he should not gift it away, etc. Determined to save the Rs 3,000 crore fortune, which would go to a trust controlled by the villains if he failed, the Superstar sets out to complete what appears to be a fairly simple, straight-forward task. Like you would have guessed by now, it is anything but that simple.
Spending big money the right way is not as easy as it may seem. Often, it takes a Rajnikanth to do it.
The Supreme Court has assigned one such Rajniesque task to the Sebi wholetime member (WTM). The apex court directions say that Sahara will deposit the amount and all the relevant documents with Sebi and Sebi will in turn execute these refunds.
This is different from Sebi’s June 2011 order, where the onus of refunds was on the Sahara group itself. They were required to execute the refunds and submit a report by peer-reviewed auditors.
Therefore, over the next few weeks, the whole time member is supposed to locate some 30 million people, verify their identity and hand over refunds running into thousands of crores. To put things in perspective, the government’s Aadhar project spent over Rs 1,900 crore over the past three years to identify and enroll some 200 million people.
According to the submissions before the court, Sahara group firms had an outstanding of Rs 24,029 crore to 29.6 million investors as on August 31, 2011.
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It is likely that Sahara will claim that it has refunded a portion of these over the last one year. It has to submit details of such refunds by September 10.
The WTM has to check the veracity of these refunds, too. If it is not satisfied with the documentation, then it can direct the companies to deposit the original amount , which will in turn be appropriated by the government of India. The other issue is Sebi had directed that these refunds should be made through cheques or pay orders. If Sahara’s claims that this money is raised from unbanked rural people are true then even that is going to be a challenge.
Within Sebi, there are two WTMs at present. While the department of issues, which framed charges against Sahara, falls under Prashant Saran, the legal affairs department comes under Rajeev Kumar Agarwal. Either department may not have more than a dozen officers.
It is not clear if even these resources can be released from their routine work and spared for this massive operation. The court has empowered Sebi to take assistance from finance experts and investigative authorities to finish the job and has asked Sahara to pay for it. Finding them in quick time on this scale may not be easy. Nothing is impossible. But some things need the confidence, conviction and capabilities of Rajnikanth. Hope Sebi has one.