Rs 25,000+ crore from Sahara-Sebi refund corpus could go to GoI fund

Call it a Rs 25,000-crore riddle. While the Sahara Group deposited as much as Rs 25,163 crore to be repaid to those who purchased optionally fully convertible debentures, only a share more than Rs 138 crore could be returned to depositors since 2012. While this baffling situation – 0.55% of the money refunded in about a dozen years – has come to the limelight after the death of Sahara group chief Subrata Roy, the government is apparently studying legalities to transfer the unclaimed fund to its own accounts which, it can, then return to investors who come up with proof of their investments.

The Economic Times has reported that if everything goes fine, the entire corpus of unclaimed funds of the Sahara-Sebi Refund Account would be transferred to the Consolidated Fund of India.

In 2012, the Supreme Court upheld a ruling by market regulator the Securities and Exchange Board of India (Sebi) which directed Sahara group companies Sahara India Real Estate Corp and Sahara Housing Investment Corp to refund investors with interest. The necessary money had to be deposited with Sebi.

But none was prepared for what followed the Supreme Court order for refund. In the next 11 years (up to March 31, 2023) only about Rs 138 crore was returned. The number of claimants who submitted applications was 17,526. The rest of the money is lying unclaimed.

“If, after the verification of details furnished, (Sebi) is unable to find out the whereabouts of all or any of the subscribers, then the amount collected from such subscribers will be appropriated to the government of India,” the Supreme Court had said in its order.

With virtually no progress in refunding the huge amount, officials told the newspaper that the option of transferring the money to the Consolidated Fund of India (with a separate account) for eventually refunding investors could certainly be explored.

Another official said that if no claimants are found, the “funds can be used for pro-poor programmes or any other public welfare.” All the legalities could be explored now.

Earlier in 2023 following an apex court order March, Rs 5,000 crore was transferred to the Central Registrar of Cooperative Societies for distributing to any bonafide claimant of the Sahara Group of Cooperative Societies. A dedicated portal was also created for refunds. The portal was inaugurated by home and cooperatives minister Amit Shah in July. It was supposed to facilitate the refund process.

While Sahara group had raised the money through the sale of optionally fully convertible debentures, Sebi stepped in to contend that it did so without the permission of the market regulator and the money had to be refunded. After a legal battle, the Supreme Court upheld the Sebi order.