SEBI begins refund of money to bondholders in Sahara case
14 May 2013
The Securities and Exchange Board of India (SEBI) has initiated the process of refund of the money belonging to individual investors who have invested in Sahara Group's bonds, as directed by the Supreme Court.
The Supreme Court in its judgement had directed refund of Rs24,000 crore raised by the two Sahara group realty outfits - Sahara India Real Estate Corp Ltd and Sahara Housing Investment Corp Ltd - by way of optionally fully convertible bonds (OFCBs).
The funds were raised through "various illegalities", skirting SEBI rules.
Market regulator SEBI said it has begun the process of refund to individual investors who have been verified by it so far.
Since there are a number of investors having multiple bond holdings, some names appearing several thousand times in the Sahara list of investors, SEBI said money is being refunded only in those cases where names have been properly verified. Refund for others will have to wait till the next direction from the SC, which is likely to hear the case on 17 July.
The list of investors supplied by Sahara is replete with instances of one name appearing at hundreds of places and several names sharing a common address. However, the majority involves untraceable addresses and other investor details.
Sahara had deposited Rs5,120 crore with SEBI against the SC order to refund the entire amount of Rs24,000 crore collected from investors, which Sahara claims to be from 30 million people across the country.
Sahara claims to have directly refunded around Rs20,000 crore to bondholders of two Sahara firms directly. This claim, however, is yet to be verified independently.
The refunds, if any, to the 'genuine' investors finding multiple mentions in the Sahara list would be made after further probe into these details and a subsequent direction from the Supreme Court.
SEBI has already written to the Enforcement Directorate, RBI and other government agencies to look into possible violations of rules by Sahara in this matter, including any money laundering activities through fictitious entities.