As 'chit-fund' schemes promising dream returns multiply across India, the Securities & Exchange Board of India is finding it increasingly difficult to repay poor investors in the Sahara Group racket.
The Supreme Court last month ordered SEBI to ensure the repayment of over Rs24,000 crore to investors. But the SEBI guidelines issued last month insist that every claimant must have a bank account and other identification.
Now the regulatory body finds itself flooded with claims from those who believed in the Sahara promises but don't have even a bank account.
The details missing in most of the applications are information about the bank accounts of the claimants and proof of their address. And of course PAN numbers; forget about the ever-but-never happening Aadhar.
While PAN details are not mandatory for the refund, except for the cases where applicants are claiming exemption from deduction of tax at source for such payments, the bank accounts are a must for all the investors seeking the refund.
There is also the little detail of claiming tax exemption on the refund. Applicants are required to provide details of their other income and investments in a prescribed format. And the number of false claimants doesn't simplify the regulator's job.
Two Sahara group firms, Sahara Housing Investment Corporation Ltd and Sahara India Real Estate Corp Ltd, have been asked by the Supreme Court to refund more than Rs24,000 crore raised from an estimated three crore investors by aggressively selling bonds.
This is quite apart from the money-grabbing scheme in West Bengal, which has prompted the state government to agree to new central controls.