The recent passing of Subrata Roy, the founder of the Sahara Group, has not concluded the regulatory scrutiny surrounding the entity. Madhabi Puri Buch, the chairperson of the Securities and Exchange Board of India (SEBI), emphasized on November 16 that the Sahara matter remains pertinent for the capital markets regulator, even in the aftermath of Roy’s death, as it pertains to the conduct of the entity.
Addressing reporters during a FICCI event, Buch clarified that SEBI’s concern revolves around the conduct of the entity itself, and it will persist irrespective of the individual’s vitality.
Subrata Roy, a controversial figure, succumbed to a prolonged illness at the age of 75 on November 14. Following his demise, the spotlight returned to undistributed funds exceeding Rs 25,000 crore, which were held in the capital markets regulator’s account.
The roots of this matter trace back to 2011 when SEBI issued directives to two Sahara Group firms, Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL). The order mandated the refund of funds raised from nearly 3 crore investors through Optionally Fully Convertible Bonds (OFCDs), as the regulator found the fundraising to be in violation of its rules and regulations.
After a protracted legal process involving appeals and cross-appeals, the Supreme Court on August 31, 2012, upheld SEBI’s directions, compelling the two firms to refund the collected money with a 15% interest rate. Sahara was subsequently instructed to deposit an estimated Rs 24,000 crore with SEBI for further refunds to investors, despite the group’s assertion that it had already refunded over 95% of investors directly.
SEBI’s latest annual report reveals that over 11 years, the regulator disbursed Rs 138.07 crore in refunds to investors of the two Sahara Group firms. The saga continues as SEBI maintains its oversight, ensuring the enforcement of regulatory directives in the complex and long-standing Sahara matter.