Sebi unravels Sahara document maze

600 staffers and 200 scanners toiled for a year to make sense of 127 truckloads of documents

The Securities and Exchange Board of India (Sebi) seems to have finally mapped the maze of truckloads of documents sent by the two Sahara group entities in the famous repayments case.

During the hearing at the Supreme Court on Tuesday, Sebi counsel Arvind Datar told the bench all the documents given by Sahara had been sorted. “One year; 600 people have worked day and night and the task is complete,” he declared.

Taking on the Sahara group’s criticism that the regulator had not verified any documents, Datar said, “The bulk of the documents came to us in 127 truckloads in December (2012). We found to our horror that the applications and refund vouchers were deliberately separated.

WHAT SEBI SAID IN COURT:

• The bulk of the documents came to us in 127 truckloads in December 2012. We found to our horror that the applications and refund vouchers were deliberately separated. A single box contained forms from different branches and so on
• We bought 200 scanners. We employed 200 people in three shifts and we have scanned all the documents and assigned a control number. Today, we are in a position to say if we give the control number, both the form and refund voucher would come out

A single box contained forms from different branches and so on.” The group had sent 30.4 million application forms and 22 million refund vouchers in those truckloads, jumbled in different cartons. Datar said over the past 11 months Sebi had worked hard on the verification.

“We bought 200 scanners. We employed 200 people in three shifts and we have scanned all the documents and assigned a control number. Today, we are in a position to say if we give the control number, both the form and refund voucher would come out,” he added.

Group promoter Subrata Roy had complained to the court that the group had paid Rs 7 crore in expenses and had offered to send 500 or 1,000 people to help Sebi sort “but Sebi has so far refunded only Rs 1 crore”.

He added, “Did they respect your order? Why did they not accept the documents?”

According to Roy, the investors were not responding to Sebi letters because they had already received the money. “Why would they spend a postage of two rupees and write to Sebi?” he asked.

“This story put forth by Sahara of having made cash refunds cannot be believed,” Datar told the court, adding Sebi has so far received 3,500 claims, totalling Rs 27 crore. It had not proceeded with the refunds because there were several investors, it had found, with multiple accounts. “For example, there was an Anirudh Singh, who had 1,433 accounts,” Datar said. There are 1,200 such cases with multiple accounts for a total sum of Rs 12 crore, he added. There were some other discrepancies such as mismatch of dates, wherein the redemption voucher shows a date in May but the refund has been shown as given in October.

“We wanted the court’s directions on how these refunds are to be dealt with,” Datar said. Sebi proposed to dispose the claims in multiple accounts up to a limit of Rs 2 lakh. It also proposed to issue fresh advertisements, including in regional newspapers, to call for refund applications from the investors.