Legal proceedings against Sahara group to continue: Sebi chairperson

Case is against group or entities and not against one individual, says market regulator after death of Subrata Roy

India’s market regulator will continue legal proceedings against the Sahara group over refund of more than Rs 60,000 crore after the death of Subrata Roy, the business group’s chairman.

“The case is against the group or entities and not against one individual. Passing of one person doesn’t change anything. The investor refund process will continue,” said Madhabhi Puri Buch, chairperson, Securities and Exchange Board of India (Sebi).

When asked why only a few investors have come forward to claim refunds, Buch said, “Our actions are dependent on the directions of the SC-appointed committee. As per their recommendations, multiple rounds of advertisements have happened. Disbursements have happened to whoever is coming ahead with proof of investment.”

 

Buch was speaking on the sidelines of a capital market conference organised by industry body FICCI.

As on March 31, 2023, Sebi had received 19,650 applications involving 53,687 accounts. Refunds have been made with respect to 17,526 applications involving 48,326 accounts for an aggregate amount of Rs 138.07 crore including the interest amount of Rs 67.98 crore, according to Sebi’s latest annual report for the 2022-23.

SEBI, in 2011, passed orders against Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corporation (SHICL) asking them to refund Rs 24,000 crore raised from millions of investors via so-called optionally fully convertible debentures (OFCDs), which were in contravention of the provisions of the Sebi Act.

The orders were upheld by the Supreme Court in 2012.

In 2018, Sebi passed another order directing Sahara India Commercial Corporation (SICCL) to return Rs 14,100 crore, along with 15 per cent interest, raised between 1998 and 2009 from nearly 20 million investors.

The fund mobilisation by SICCL came to light when Sebi was investigating SIRECL and SHICL.

In November 2020, Sebi petitioned the Supreme Court to Roy to pay Rs 62,600 crore.

The Sahara group had deposited over Rs 15,000 crore with Sebi. This amount was to be distributed to Sahara investors. However, it remains a mystery why only a few investors came forward to stake claim on these funds.