Nov 15 (The Street Press India) – Sebi’s bank account, holding more than Rs 25,000 crore in unclaimed funds, is in the spotlight again due to the passing of Sahara Group’s chief, Subrata Roy. He aged 75, passed away on Tuesday night in Mumbai after a prolonged illness.
Subrata Roy confronted various regulatory and legal challenges related to his group’s companies accused of bypassing regulations through Ponzi schemes, charges consistently denied by his group. In 2011, Sebi instructed two Sahara Group firms, Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL), to reimburse funds collected from approximately 3 crore investors via Optionally Fully Convertible Bonds (OFCDs).
The directive followed Sebi’s determination that the funds raised by the two firms violated its rules. Following a prolonged series of appeals, the Supreme Court on August 31, 2012, upheld Sebi’s order for the two companies to reimburse investors along with a 15% interest. Sahara was subsequently instructed to deposit approximately Rs 24,000 crore with Sebi for further refunds to investors, despite the group’s claim that it had already directly refunded over 95% of the investors.
Sebi, as per its latest annual report, refunded Rs 138.07 crore to investors of two Sahara Group firms over 11 years. However, the specially-opened bank accounts for repayment now hold more than Rs 25,000 crore. With the majority of bondholders not claiming, Sebi’s total refunds increased by approximately Rs 7 lakh in the last fiscal year 2022-23, while the balance in Sebi-Sahara refund accounts rose by Rs 1,087 crore during the same period.
According to the annual report, as of March 31, 2023, Sebi received 19,650 applications involving 53,687 accounts. Refunds have been processed for 17,526 applications (48,326 accounts), totaling Rs 138.07 crore, including Rs 67.98 crore in interest. The remaining applications were closed due to untraceable records from the data provided by the two Sahara Group firms. In the previous update, as of March 31, 2022, Sebi had reported total refunds of Rs 138 crore for 17,526 applications.
Sebi reported that, as of March 31, 2023, it has recovered an aggregate amount of Rs 15,646.68 crore under Supreme Court orders and regulator-issued attachment orders. This sum, along with accrued interest after refunds to eligible bondholders, was deposited in nationalized banks as per the Supreme Court’s August 31, 2012, judgment. The total amount deposited in nationalized banks stands at approximately Rs 25,163 crore as of March 31, 2023, according to Sebi.
As of March 31, 2022, the deposited amount in nationalized banks was Rs 24,076 crore, Rs 23,191 crore on March 31, 2021, and Rs 21,770.70 crore on March 31, 2020.
In August, the government initiated the refund process of Rs 5,000 crore for depositors stuck in four cooperative societies of the Sahara Group. Cooperation Minister Amit Shah launched the ‘CRCS-Sahara Refund Portal’ in July to streamline the return of funds to investors, with approximately 18 lakh depositors registered on the portal.
In March, the government declared its intention to reimburse the funds to 10 crore investors from the four cooperative societies within a 9-month timeframe. This decision followed a Supreme Court directive instructing the transfer of Rs 5,000 crore from the Sahara-Sebi refund account to the Central Registrar of Cooperative Societies (CRCS).
