Virendra Pandit
New Delhi: Clearing the air about the fate of refund of over Rs.60,000 crore to investors after the death of Sahara Group founder-chairman Subrata Roy, India’s market regulator said on Thursday the legal proceedings against the group will continue.
Replying to questions on the sidelines of a capital market conference organized by industry body FICCI, Securities and Exchange Board of India (SEBI) Chairperson Madhabhi Puri Buch, clarified that the case for refund is against the group or entities and not against any individual. The death of one person doesn’t change anything. The process for refunds to investors will continue.
When asked why only a few investors have come forward to claim refunds, Buch said, “Our actions are dependent on the directions of the Supreme Court-appointed committee. As per their recommendations, multiple rounds of advertisements have happened. Disbursements have happened to whoever is coming ahead with proof of investment.”
As of March 31, 2023, SEBI had received 19,650 applications involving 53,687 accounts. Refunds have been made concerning 17,526 applications involving 48,326 accounts for an aggregate amount of Rs 138.07 crores, including the interest amount of Rs 67.98 crore, according to the market regulator’s latest annual report for 2022-23.
In 2011, SEBI passed orders against Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) asking them to refund Rs 24,000 crores 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 Supreme Court upheld the SEBI order in 2012.
In 2018, SEBI passed another order directing Sahara India Commercial Corporation Ltd (SICCL) to refund Rs 14,100 crores, along with 15 percent interest, raised between 1998 and 2009 from nearly 20 million investors.
The fund mobilization by SICCL came to light when SEBI was investigating SIRECL and SHICL.
In November 2020, the regulator petitioned the Supreme Court to Roy to pay Rs 62,600 crores.
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 claims on these funds.