Market Regulator Foxed by Ghost Investors in Sahara - The New Indian Express

Market Regulator Foxed by Ghost Investors in Sahara

Published: 03rd March 2014 01:29 AM

Last Updated: 03rd March 2014 01:38 AM

Market regulator Sebi, which is probing the Sahara Group case, suspects the latter may have provided it details of mostly ‘ghost or fictitious’ investors thus reducing the chances of finding genuine investors.

According to sources, there has been a considerable delay in response from both Central and State government agencies from whom Sebi has been seeking assistance to attach Sahara Group properties for almost a year.

Sebi is also seeking help from its peers in countries like Mauritius, the UK and the US. Besides, sources believe Sahara’s overseas ventures are also under scrutiny.

It may be noted that in 2012, the Supreme Court ruled that sale of bonds by two Sahara companies violated norms and that the company repay about $2.8 billion to investors via Sebi. While Sahara contends it paid investors directly, Sebi is not convinced. Group chairman Subrato Roy was arrested last week in this regard.

This is not the first time Sahara locked horns with the regulators. In 2008, the RBI cracked down on Sahara India Financial Corp, which was in the business of collecting savings from people without bank accounts and prevented it from doing so for violating norms.

According to a senior official, there was a suspicion of possible money-laundering with a majority of investor accounts, from about 3 crore listed by Sahara, not turning out to be genuine.

Sources also said other regulatory agencies would need to play a more active role in such a scenario.

Even those investors appearing genuine, which could be a few lakhs, a majority fall in the multiple investor category. Refunds have been made as yet only for individual genuine investor accounts.

Last year, Sahara has deposited Rs 5,120 crore with Sebi and the company accused the regulator for going slow on repayment. However, Sebi said the refund task was too complex and Sahara has not been forthcoming with investor verification. Sebi didn’t disclose the amount of refunds made so far. Sahara claims the total refund is over Rs 1 crore.

Meanwhile, Sebi is also expected to ask the Supreme Court about the genuine multiple investors or those having multiple deposits, and they will accordingly refunded.

On its part, Sebi has put in place an Officer on Special Duty and other dedicated officers to deal refunds and objections and claims relating to the Sahara properties to be sold.

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