EOW begins probe against Sahara group

The Mumbai Economic Offences Wing (EOW) has initiated a probe into the Sahara group of companies following a complaint from the capital markets regulator, Securities and Exchange Board of India (Sebi).  

“The probe is on the basis of a letter sent by Sebi,” said a senior EOW official, requesting anonymity. No case has yet been registered against the group and the inquiry remains at a preliminary stage, the official added.

Media reports indicated the probe would be conducted into alleged intimidation of investors, but the official quoted above declined to comment on it. Email queries sent to Sebi and the Sahara Group for comments did not receive an immediate reply.

The probe comes even as Sebi summoned Sahara chief Subrata Roy and other senior officials to its office in the Bandra Kurla Complex here on Wednesday.  

Sebi has, meanwhile, moved the Supreme Court for permission to detain Roy and to initiate contempt proceedings for non-compliance with its orders to refund money to investors. The case is set to be heard on April 22.

The case involves two Sahara group companies, which raised money from the public through the issue of debentures. Sahara Housing Investment Corp and Sahara India Real Estate Corp held investor funds to the tune of Rs 24,000 crore from 30 million investors. Sebi and later the Supreme Court noted irregularities in the manner in which the money was raised and asked the companies to refund the same to investors.

Sahara deposited Rs 5,120 crore with the stock market regulator and claimed that only Rs 2,620 crore needed to be returned to investors as the remainder had already been refunded.

Sebi noted in its order dated February 13 there wasn’t sufficient evidence to establish that such a refund had actually taken place. It ordered attachment of assets of Sahara group companies as well as senior officials, including Sahara chief Roy.

Subsequently, Sahara has moved the Securities Appellate Tribunal against the attachment orders. The Tribunal is scheduled to hear the Sahara appeal on April 13.