When Roy’s Sahara walked on the wrong side of the law, and lost
Subrata Roy's death puts the spotlight on the litigation surrounding the Sahara group and the ₹25,000 crore with the capital markets regulator for distribution to investors.
Mumbai: Subrata Roy’s death brings into focus the slew of litigation surrounding the Sahara group, and in particular the ₹25,000 crore lying with the capital markets regulator for distribution to its investors. Criminal proceedings initiated against Roy, experts said, will be suspended following his death.
In 2011, regulator Sebi ordered two Sahara group firms—Sahara India Real Estate Corp. Ltd (SIREL) and Sahara Housing Investment Corp. Ltd (SHICL)—to refund the money raised from nearly 30 million investors via bonds known as optionally fully convertible bonds (OFCDs).
The order came after Sebi ruled that the funds raised by the two firms violated its rules and held (among others) Subrata Roy liable for the same.
After appeals and cross-appeals, Supreme Court on 31 August 2012 upheld Sebi’s directions asking the two firms to refund the money of investors with 15% interest.
Sahara was eventually asked to deposit an estimated ₹24,000 crore with Sebi for refund to investors, though the group has maintained it had already refunded over 95% of investors.
Retired apex court judge, B.N. Agarwal was appointed to oversee that the orders are complied with within three months. Criticizing the Sahara group, the Supreme Court had said, “There can...be no hesitation in accepting that...there was a pre-planned attempt at the hands of the SIREC and SHIC to bypass the regulatory and administrative authority of Sebi...But having so concluded, it is essential to express, that there may be no real subscribers for the OFCDs issued by SIREC or SHIC. Or alternatively, there may be an intermix of real and fictitious subscribers.”
According to the regulator’s latest annual report, the Securities and Exchange Board of India (Sebi) refunded ₹138.07 crore over 11 years to investors of two Sahara group firms. The amount in bank accounts for repayment is now over ₹25,000 crore with interest.
Later, in September 2020, the Central Registrar of Cooperative Societies sought a probe by Serious Fraud Investigation Office (SFIO) into investments by four cooperatives linked to Sahara group after it got 15,000 complaints. These cooperative societies were alleged to have raised about ₹86,000 crore.
The credit societies had refuted allegations of wrongdoing and said all their investments were made as per law. In March, the Supreme Court directed that ₹5,000 crore out of unutilized amount of ₹24,000 crore in Sahara-Sebi Refund account be disbursed to depositors of Sahara Group of Cooperatives Societies.
In July, cooperation minister Amit Shah launched ‘CRCS-Sahara Refund Portal’ to facilitate return of the money to investors. Eighteen lakh depositors are registered on the portal. In August, the process to refund the money to the depositors started.
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First Published:15 Nov 2023, 11:33 PM IST
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