Subrata Roy death: How will Sahara Group investors' pending money be affected? - Hindustan Times
close_game
close_game

Subrata Roy death: How will Sahara Group investors' pending money be affected?

Nov 15, 2023 01:02 PM IST

Subrata Roy, chief of Sahara Group, passed aged 75, bringing attention back to the over ₹20,000 crore in undistributed funds held by Sebi.

Sahara Group's chief Subrata Roy passed away in Mumbai at the age of 75.

Sahara chief Subrata Roy arrives to appear in the Supreme Court for a hearing in a case against him filed by the Securities and Exchange Board of India (Sebi) over a dispute of returning money to its investors, in New Delhi, 2017.(PTI)
Sahara chief Subrata Roy arrives to appear in the Supreme Court for a hearing in a case against him filed by the Securities and Exchange Board of India (Sebi) over a dispute of returning money to its investors, in New Delhi, 2017.(PTI)

The spotlight is once again on the over 20,000 crore in undistributed funds held by the Securities and Exchange Board of India or Sebi, the capital markets regulator, following accusations that Roy's group firms bypassed regulations with Ponzi schemes—a charge consistently denied by his group.

Hindustan Times - your fastest source for breaking news! Read now.

Sebi recovered 25,000 crore from Sahara Group

In 2011, SEBI directed Sahara Group firms -- Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL) -- to refund funds raised from about 3 crore investors through Optionally Fully Convertible Debentures (OFCDs), citing a violation of rules. It was promised that the securities could be converted into shares at the expiry of a certain period at a predetermined price, if the investor chooses.

After a legal process, the Supreme Court upheld SEBI’s decision in 2012, instructing Sahara to deposit around 24,000 crore for investor refund.

Sebi reported that, as of March 31, this year, it has recovered an aggregate amount of 15,646.68 crore. This sum, along with accrued interest post refunds to eligible bondholders, has been deposited in nationalised banks in compliance with the SC’s judgment. As per Sebi’s statement, the total amount deposited in the nationalised banks as of March 31, 2023, stands at approximately 25,163 crore.

What happened to SIREL, SHICL investors' money?

In the latest annual report, Sebi said issuing refunds of 138.07 crore to investors of two Sahara Group firms over 11 years. As of March 31, 2023, Sebi received 19,650 applications involving 53,687 accounts, with refunds made for 17,526 applications totaling 138.07 crore, including 67.98 crore in interest. Some applications were closed as their records were untraceable in data provided by Sahara Group firms.

What happens to Sahara cooperatives depositors’ funds?

In August, the government initiated the process to refund 5,000 crore to 10 crore depositors stuck in Sahara Group's four cooperative societies within 9 months. The government, following a Supreme Court order, transferred 5,000 crore from the Sahara-Sebi refund account for the refunds.

Cooperation Minister Amit Shah launched the 'CRCS-Sahara Refund Portal' in July, registering around 18 lakh depositors. The refund is in process and will not have any impact from Roy’s demise.

(Inputs from PT

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News, Vijay Shekhar Sharma along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
  • ABOUT THE AUTHOR
    author-default-90x90

    Follow the latest breaking news and developments from India and around the world with Hindustan Times' newsdesk. From politics and policies to the economy and the environment, from local issues to national events and global affairs, we've got you covered.

SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Tuesday, February 27, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On