Subrata Roy: Over ₹ 25,000 crore of funds collected by Sahara Group companies through Optionally Fully Convertible Bonds (OFCDs) remain unclaimed with the Securities and Exchange Board of India (Sebi). The funds were ordered to be refunded to investors by the Supreme Court in 2012, but only a small portion has been claimed so far.
The Regulatory Battleground
Subrata Roy, aged 75, succumbed to a prolonged illness in Mumbai on Tuesday night. His legacy was intertwined with regulatory and legal confrontations related to Sahara Group firms accused of regulatory breaches through Ponzi schemes—a charge steadfastly denied by the conglomerate.
Sebi’s Verdict and Legal Odyssey
In 2011, Sebi directed Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL) to refund funds raised from approximately 3 crore investors through Optionally Fully Convertible Bonds (OFCDs). Despite a protracted legal battle, the Supreme Court, on August 31, 2012, upheld Sebi’s directive, mandating the refund with 15% interest.
Sebi’s Refund Endeavors
Sebi, in line with the Supreme Court‘s orders, compelled Sahara to deposit an estimated ₹24,000 crore for further investor refunds. However, Sahara contends that it has already directly refunded over 95% of the investors. Sebi’s latest annual report reveals that ₹138.07 crore has been issued in refunds over 11 years, with the balance in Sebi-Sahara refund accounts surpassing ₹25,000 crore.
Challenges in Refund Process
Despite Sebi’s efforts, the total amount refunded witnessed a marginal increase, highlighting challenges in the absence of claims from the majority of bondholders. As of March 31, 2023, Sebi received 19,650 applications, with only ₹7 lakh added to the total amount refunded during fiscal year 2022-23.
Recovery Efforts and Deposits
Sebi reported that, as of March 31, 2023, it had recovered ₹15,646.68 crore under various court orders. This amount, along with accrued interest, was deposited in nationalized banks, bringing the total to ₹25,163 crore. This marks an increase from ₹24,076 crore in 2022, ₹23,191 crore in 2021, and ₹21,770.70 crore in 2020.
The government, in August, initiated the refund process of ₹5,000 crore for depositors trapped in four cooperative societies of Sahara Group. Cooperation Minister Amit Shah‘s ‘CRCS-Sahara Refund Portal’ aims to expedite returns for approximately 18 lakh registered depositors within 9 months.