Funds over Rs 25,000 cr with Sebi in focus after Subrata Roy's death

The undistributed funds totalling over Rs 25,000 crore lying with the capital markets regulator Sebi's account have come back into focus after the demise of Sahara Group's chief Subrata Roy.

Roy passed away in Mumbai on Tuesday night at the age of 75 after battling a prolonged illness.

He faced multiple regulatory and legal battles in connection with his group firms that were accused of circumventing regulations with Ponzi schemes, allegations his group always denied.

In 2011, capital markets regulator Sebi ordered two Sahara Group firms -- Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL) -- to refund the money raised from nearly 3 crore investors through certain bonds known as Optionally Fully Convertible Bonds (OFCDs).

This order came after the regulator ruled that the funds were raised by the two firms in violation of its rules and regulations.

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 the money collected from investors with 15 per cent interest.

Sahara was eventually asked to deposit an estimated Rs 24,000 crore with Sebi for further refund to investors, though the group has been maintaining that it had already refunded more than 95 per cent of investors directly.

According to the capital markets regulator's latest annual report, the Securities and Exchange Board of India (Sebi) issued Rs 138.07 crore in refunds over 11 years to investors of two Sahara Group firms.

Meanwhile, the amount deposited in specially-opened bank accounts for the repayment has risen to more than Rs 25,000 crore.

In the absence of claims from a majority of the bondholders of the two Sahara companies, the total amount refunded by Sebi inched up by just about Rs 7 lakh during the last fiscal 2022-23, while the balance in Sebi-Sahara refund accounts rose by Rs 1,087 crore during the year.

Going by the annual report, Sebi received 19,650 applications involving 53,687 accounts as of March 31, 2023. Of these, "refunds have been made concerning 17,526 applications involving 48,326 accounts for an aggregate amount of Rs 138.07 crore, including the interest amount of Rs 67.98 crore." The remaining applications were closed due to their records not being traceable in the data provided by two Sahara Group firms.