Get Premium Data for Cyber Monday: Up to 55% Off InvestingProCLAIM SALE

Sahara Group's Subrata Roy's death brings focus on undistributed Rs 25,000 crore funds

Published 15/11/2023, 17:56
© Reuters.

The death of Subrata Roy, the founder-chairman of Sahara Group, has brought renewed focus on the approximately Rs 25,000 crore ($3.1 billion) in undistributed funds held by the Securities and Exchange Board of India (SEBI). Roy passed away on Tuesday at the age of 75. Under his leadership, Sahara Group became a major Indian conglomerate and was once recognized by Time magazine as the country's second-largest employer.

The Supreme Court of India had directed two Sahara companies in 2011 to refund investors who had bought Optionally Fully Convertible Debentures (OFCDs) that were issued in violation of regulations. This decision was upheld in 2012, and it was affirmed that Sahara must deposit Rs 24,000 crore with SEBI for the reimbursement of investors over an 11-year period.

Despite Sahara's claims that it had directly refunded over 95% of its investors, SEBI has only disbursed Rs 138.07 crore to claimants from 2012 to 2023. The undistributed refunds have contributed to the balances in the SEBI-Sahara accounts exceeding Rs 25,000 crore. In August this year, following a Supreme Court order, the Indian government commenced a refund process for Rs 5,000 crore to depositors trapped in four of Sahara Group's cooperative societies.

The Centre launched the CRCS-Sahara Refund Portal to facilitate these refunds. Nearly 18 lakh depositors have registered on the portal, with the government pledging to return their money within nine months.

Sahara has accused SEBI of unjustly withholding its funds and obstructing economic progress. The group requested the return of its money after alleging there were no remaining claimants post-July 2018. However, by March 2023, SEBI had only refunded Rs 7 lakh out of the Rs 15,647 crore recovered from Sahara, even though the funds grew by Rs 1,087 crore in FY 2022-23 due to interest accruals.

The saga surrounding Sahara Group and its refund issues with SEBI has been long-standing and complex. With Roy's passing and the large sums still held by SEBI, scrutiny over these funds and their rightful disbursement is expected to intensify.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.