SFIO searches Sahara's office in Lucknow, probe against group widens

Group's companies suspected to have diverted a huge amount of money to other subsidiaries after taking collections from depositors.

The Serious Fraud Investigation Office (SFIO) on Thursday searched headquarters of the Sahara group in Lucknow in an investigation against the three companies that allegedly collected crores of money from the public. 

SFIO said the group's companies diverted a huge amount of money to other subsidiaries after taking collections from depositors for finance schemes. “There are huge inter-company investments/advances as indicated by the financial statements of these companies and the activities of the various group companies are intertwined,” it said on Thursday.

SFIO has got approval from the Ministry of Corporate Affairs to investigate six other group companies it suspects of serious irregularities. A Delhi team of SFIO searched Sahara's Lucknow office this morning and its work may continue Friday. 

Sources in the agency said there are at least 15,000 complaints against nine Sahara companies including Sahara Q Shop Unique Products Range Ltd (SQSUPRL), Sahara Gold Mart Ltd (SQGML) and Sahara Housing Investment Corporation Ltd (SHICL). 

According to SFIO, the companies collected as an advance against future supply of goods/ supply of gold from 2012 onwards. This is apart from the money that was collected from investors in the name of Optionally Fully Convertible Debentures (OFCD) between 2009 and 2012. 

SFIO initiated a probe in October 2018, against Sahara Q Shop Unique Products Range following complaints by 744 people. 

The agency refused to disclose the name of additional companies under investigation, but sources said that it could be Sahara’s cooperative societies that allegedly have not paid matured deposits to investors. 

Sources said that some depositors had put money in Sahara Housing and Sahara Q Shop Unique and their investment was transferred to the cooperative societies when the group ran into regulatory trouble with the Securities and Exchange Board of India (Sebi) and then the Supreme Court. 

The Sahara group faces action from Sebi with respect to money raised by two entities: Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) between 2012 and 2014. That investigation led to the arrest of Sahara group chairman Subrata Roy.

The Supreme Court had remanded Roy to prison in 2014 over the group’s failure to pay up dues estimated to be Rs 25,781 crore to Sebi.