Very few investors in Sahara’s firms have come forward to reclaim their money despite SEBI’s repeated notices.
What was the scam about?
‘Sahara vs SEBI’ case involves the issuance of Optionally Fully Convertable Debentures (OFCD) by the two companies of Sahara India Pariwar.
OFCD is a type of debt security where the option is given to the bond holder to convert his debenture into equity share after certain time.
The SEBI had the companies to stop issuing the bonds and return the money to investors.
Sahara has claimed that the said bonds are hybrid products, thus does not come under the jurisdiction of SEBI.
It argued that hybrid debentures are governed by Registrar of Companies (ROC), under the Ministry of corporate Affairs, from which permission had already been taken.
How did the case proceed?
While Sahara contested SEBI’s order in various courts, before the SC pronounced its final verdict, Sahara claimed that it has already paid back 93% of the investors and discharged its OFCD liability to the tune of Rs. 23500 crores.
Subsequently, the group failed to satisfy the Supreme Court with evidence of the source of funds used to make the claimed return payments.
This calls for a thorough probe to reveal all its possible money laundering dimensions.
Where are the investors?
The total amount that needs to be refunded according to SEBI’s estimate now stands at 40,000 crores.
Of this, SEBI has received an aggregate amount of about Rs.14,487 crores from the Sahara Group.
SEBI has been requesting genuine investors in Sahara to step forward and claim their money since 2013.
But even after 4 years of notice, only Rs.85.02 crores, of this amount has actually been returned to investors.
This obviously raises questions about the authenticity of Sahara’s investor base, which needs to be investigated thoroughly.
Sahara’s view that most investors aren’t coming forward as they’ve already been paid stands on weak ground due inherent inconsistencies.
What is the way ahead?
Enforcement Directorate must step in to expedite its current probe into the money laundering angle.
This will yield better results than waiting for millions of missing investors to turn up.
Finally, the Ministry’s rationale for approving Sahara’s initial fund-raising efforts should not be left un-investigated either.
