NEW DELHI: The demise of Sahara Group chairman Subrata Roy on late Tuesday has put the focus on undistributed funds to the tune of Rs 25,000 crore that is currently held by the capital markets regulator Securities and Exchange Board of India (Sebi). Roy, 75, passed away in Mumbai after battling a prolonged illness. From leading a group which at its peak was among India’s biggest conglomerates, the embattled billionaire faced a slew of regulatory and legal hurdles in the last one and half decades of his life.
Sahara Group, whose business interests ranged from finance, real estate and hospitality to owning an airline and an Indian Premium League cricket team, faced scrutiny from regulators and courts after his group firms were accused of circumventing existing norms with Ponzi schemes.
After a detailed inspection and ruling that funds raised by the two Sahara firms violated capital market rules and regulations, Sebi in 2011 ordered Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL) to refund the money raised from 3 crore investors via certain bonds known as Optionally Fully Convertible Bonds (OFCDs).
After a long process of appeals and cross-appeals, the Supreme Court on August 31, 2012, upheld Sebi’s directions asking the two firms to refund money collected from investors with 15% interest. As per Sebi’s FY23 annual report, the principal amount and interest component deposited by SIRECL and SHICL in nationalised banks in terms of the judgment dated August 31, 2012, of the Supreme Court stood at nearly Rs 25,163 crore as of March 31, 2023.
SEBI has received 19,650 applications involving 53,687 accounts from investors who were seeking a refund at the end of March 2023. Refunds have been made with respect to 17,526 applications involving 48,326 accounts for an aggregate amount of JUTS Rs 138.07 crore, including interest of Rs 67.98 crore. The remaining applications were closed either due to their records not being traceable.
Meanwhile, the central government in August 2023 started the process to refund Rs 5,000 crore of depositors whose funds are struck in four cooperative societies of Sahara Group. Before this, Cooperation Minister Amit Shah launched the ‘CRCS-Sahara Refund Portal’ in July to facilitate the return of the money to investors. About 18 lakh depositors have been registered on the portal.
Roy dies in Mumbai after battling prolonged illness
Roy, 75, passed away in Mumbai after battling a prolonged illness. From leading a group which at its peak was among India’s biggest conglomerates, the embattled billionaire faced a slew of regulatory and legal hurdles in the last one and half decades of his life. At its peak, Sahara Group’s business interests ranged from finance, real estate and hospitality to airline and IPL