Investors lobby Sebi for first-come-first-serve on Sahara refunds

Sebi may still be trying to get its hands on the capital required for payback, but at least some investors are reluctant to wait

The clamour for refunds amongst Sahara's investors seems to have taken an interesting turn.

The Securities and Exchange Board of India may still be trying to get its hands on the capital required for the payback, but at least some investors are reluctant to wait.

Many have asked the regulator if they could be refunded on a first-come-first-serve basis, according to a person familiar with the matter.

The regulator has not taken a view on the suggestions yet, said the person.

Sahara India Real Estate Corporation Ltd. (SIRECL) and Sahara Housing Investment Corporation Ltd(SHICL) raised Rs.25,781.31 crores from investors, according to affidavits filed by the Sahara group. The amounts were raised in separate issues which began in April 2008 and November 2009 respectively.

Sebi and later the Supreme Court ruled that there were irregularities in the way that the money was raised and asked that all the money be refunded.

The apex court requested B.N. Aggarwal, a retired judge, to oversee the refund process which was to be carried out by Sebi.

The two Sahara companies have so far only deposited Rs.5120 core with the regulator or roughly 20% of the money that they raised from investors, according to figures from a Sebi order dated 13th February. The two companies claimed that only Rs.2620 crore needed to be refunded and that Rs.19400 had already been paid back to investors.

The regulator noted in their order dated February 13, that the two companies had failed to supply all the documents which could be used to determine if the company had made refunds, and added that it would proceed on the assumption that no refunds had been made.

"...the documents are not furnished in the manner prescribed by SEBI and further they have been hopelessly mixed up making it virtually impossible to correlate the debenture holders and the redemption vouchers," it said.

Sebi passed an order on February 13th, for attachment of assets of the two companies and that of four directors, namely Vandana Bhargava, Ravi Shankar Dubey and Ashok Roy Choudhary as well as Subrata Roy Sahara.

Sebi also came out with an advertisement on Friday, February 22nd, telling investors that any dealings with the Sahara group entities would be at their own risk.

The regulator did not immediately respond to a query on the matter.