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Business News/ Markets / Sahara case: Govt seeks moving unclaimed funds worth over 25,000 crore to Consolidated Fund of India, says report
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Sahara case: Govt seeks moving unclaimed funds worth over ₹25,000 crore to Consolidated Fund of India, says report

Subrata Roy, founder of the Sahara Group, has passed away at the age of 75. The government is considering transferring unclaimed funds from the Sahara-Sebi Refund Account to the Consolidated Fund of India, according to news report.

Sahara Group chairman Subrata Roy. His group has been engaged in a long-running regulatory and legal battle with Sebi. Photo: ReutersPremium
Sahara Group chairman Subrata Roy. His group has been engaged in a long-running regulatory and legal battle with Sebi. Photo: Reuters

It has been reported that the government is investigating the legality of moving the unclaimed money from the Sahara-Sebi Refund Account to the Consolidated Fund of India. It is anticipated to include a clause for investors who later make their claims. According to a news report by Business Today, this decision was made following the death of Sahara Group founder Subrata Roy last week.

Subrata Roy, the architect of the vast business empire Sahara Group, passed on on Tuesday due to a cardiorespiratory arrest after a prolonged illness. Subrata Roy was 75. Subrata Roy was admitted to Kokilaben Dhirubhai Ambani Hospital & Medical Research Institute in Mumbai on Sunday after his health deteriorated. He died at 10.30 pm on Tuesday, November 14.

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In a statement, the Sahara Group said Subrata Roy died following an extended battle with complications arising from metastatic malignancy, hypertension and diabetes. Calling him an “inspirational leader and visionary", the company said, “It is with profound sadness that Sahara India Pariwar informs the demise of our Hon'ble 'Saharasri' Subrata Roy Sahara, Managing Worker and Chairman, Sahara India Pariwar."

Also Read: Subrata Roy dies at 75: Seven things to know about Sahara Group founder

The Economic Times in its report said that in the eleven years since the refund account was created, hardly any claimants had come forward. An unidentified official was quoted in the daily as saying that the option to transfer the funds to the Consolidated Fund of India with a different account in order to reimburse investors would be explored.

The funds that are collected from these subscribers will be given to the government if, following verification of the information provided, Sebi is unable to locate any or all of its subscribers. According to the report, the funds will likely be used for public welfare or pro-poor initiatives, mentioned Business Today in its news report.

After paying 138 crore to 17,526 applications involving 48,326 accounts, the total amount recovered from the group and deposited in the state-run banks stood at 25,163 crore as of March 31.

The Central Registrar of Cooperative Societies received a transfer of 5,000 crore to be used for paying genuine depositors' legal debts. To expedite the refund process, Home Minister Amit Shah set a special portal for Sahara depositors, said Business Today in its report.

Also Read: Sahara Group chief Subrata Roy dies of cardiac arrest, Sahara India Pariwar mourns loss

One of the most well-known rags-to-riches tales in Indian history, Subrata Roy was also one of the most well-known figures in India Inc. Sahara formerly sponsored the Indian cricket team, and its holdings included Grosvenor House in London and the Plaza Hotel in New York. In addition, he shared ownership of the previous Force India Formula One team.

But his problems started in 2010 when Sebi ordered two Saharan entities to refrain from raising money through the equities markets or from issuing any securities to the general public. After failing to show up for a contempt case in 2014, which resulted from his companies not returning over 20,000 crore to investors, Roy was later taken into custody.

In order for Sahara to continue repaying the investors, Sebi was requested to receive an estimated 24,000 crore. The group claimed to have made direct refunds to 95% of the investors, using "double payment" as justification for this action, according to the news report.

Also Read: Subrata Roy death news: Subrata Roy's mortal remains to be brought to Lucknow; tributes pour in

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Updated: 20 Nov 2023, 08:22 PM IST
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