Sahara Case Persists Beyond Subrata Roy’s Passing, Affirms SEBI Chief

It has been reported that refunds of only Rs 138 crore have been made to investors even though Sahara group was asked to deposit over Rs 24,000 crore with Sebi for further refunds to investors.

Sebi Chairperson Madhabi Puri Buch stated on Thursday that the Sahara case will persist for the capital markets regulator even after the demise of the group’s founder, Subrata Roy.

Subrata Roy passed away in Mumbai on Tuesday at the age of 75 after an extended illness.

Addressing reporters at a Ficci event, Buch emphasized that for Sebi, the Sahara matter revolves around the conduct of an entity, and it will continue irrespective of the presence of an individual. Responding to questions about the relatively low amount of refunds, Buch explained that the funds were returned based on the evidence of claims made by investors through a committee appointed by the Supreme Court.

It has been reported that refunds of only Rs 138 crore have been made to investors even though Sahara group was asked to deposit over Rs 24,000 crore with Sebi for further refund to investors.

Sahara group has faced many allegations, including that of running a Ponzi scheme. Troubles for Roy started in November 2010 with Sebi asking two entities of Sahara group not to mobilise funds from equity markets or from issuance of any security to the public while restraining Roy from approaching the public for raising money.

Roy was arrested in 2014 on the orders of the Supreme Court after he failed to appear before it in a contempt case arising out of non-refund of more than Rs 20,000 crore to investors by the two companies.

Subrata Roy was later granted bail, but challenges persisted for his various business ventures.

The two Sahara group companies, Sahara India Real Estate Corporation (SIRECA) and Sahara Housing Investment Corporation, raised funds in 2007-08 through Optionally Fully Convertible Debentures (OFCD). In June 2011, the capital markets regulator directed the entities to refund the funds collected from investors through OFCD, along with interest. After a protracted legal process involving appeals and cross-appeals, the Supreme Court, in 2012, ordered the refund of deposits to investors along with a 15 percent interest.

Despite the legal developments, Sahara was mandated to deposit an estimated Rs 24,000 crore with Sebi for further refund to investors. The group consistently asserted that this requirement amounted to “double payment,” contending that it had already refunded over 95 percent of investors directly.