The Chairperson Securities Exchange Board of India (SEBI), Madhabi Puri Buch confirmed on Thursday that the Sahara case remains a key focus for the capital markets regulator, even in the wake of the passing of the group’s founder, Subrata Roy on last Tuesday.
During discussions with reporters at a FICCI event, Buch underscored that, from SEBI’s perspective, the Sahara case centers around the conduct of the entity itself. She clarified that regulatory proceedings would persist regardless of the presence or absence of any specific individual.
Responding to queries regarding the relatively modest refund amounts, Buch elucidated that the disbursements were made based on evidence presented through a committee appointed by the Supreme Court, aligning with the claims made by investors.
In July, the Ministry of Cooperation launched CRS Sahara Refund Portal. This portal has been launched as part of the Ministry of Cooperation’s efforts, under the leadership of Prime Minister and with the guidance of Union Home Minister and Minister of Cooperation to reinforce the cooperative movement in the nation and safeguard the interests of cooperative members.
Despite the Supreme Court’s directive for the Sahara group to deposit over Rs 24,000 crore with SEBI for further refunds, reports suggest that only Rs. 138 crore has been refunded to investors. The Sahara group has been embroiled in multiple allegations, including accusations of operating a Ponzi scheme.
Supreme Court Direction of the Refund Portal
On March 29, 2023, the Supreme Court directed the refund of Rs. 5,000 crore from the Sahara-SEBI refund account to approximately 10 crore investors of four cooperative societies within the Sahara Group. Numerous complaints had been received nationwide regarding non-payment of deposits to these cooperative societies’ depositors.
Following directives from the Union Home Minister and Minister of Cooperation, the Ministry of Cooperation prioritized the matter, engaging in multiple meetings with relevant authorities.
A petition was filed with the Supreme Court for a status report and resolution. The court, in response, ordered the transfer of Rs. 5,000 crore from the Sahara-SEBI Refund Account to the Central Registrar for refunding investors of Sahara Group’s cooperative societies. The payment process, supervised by retired judge R. Subhash Reddy and assisted by Mr. Gaurav Agarwal, Advocate, is set to be completed in 9 months. Transparent payments will be made to legitimate investors through their bank accounts based on proper proof of identity and deposit.
Sahara Group Issue
In 2009, the Sahara Group launched initial public offerings (IPOs) for two of its companies, namely Sahara Housing Corporation Limited and Sahara India Real Estate Corporation. However, following allegations from the Securities and Exchange Board of India (SEBI) regarding the group’s alleged use of illegal methods to raise funds from the public, an investigation was initiated.
SEBI demanded that the group repay the funds to investors. This issue escalated into a complex dispute, leading to subsequent litigation in the courts which went up to the Supreme Court. And this refund portal is an initiative taken by the ministry in response to the directions of the apex court.
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