Sahara-Sebi refund account may be transferred to govt, says report

The funds are expected to be used for pro-poor programmes or public welfare, the report stated

The government is looking into the possibility of transferring unclaimed funds from the Sahara-Sebi refund account to the Consolidated Fund of India, reported The Economic Times (ET). Despite this consideration, provisions would be made to facilitate refunds for investors.

The report comes almost a week after the death of Sahara founder Subrata Roy, which heightened interest in the Sahara-Sebi refund account, although there have been minimal claimants over the decade since its establishment.

In 2012, the Supreme Court (SC) upheld a Securities and Exchange Board of India (Sebi) order, directing Sahara India Real Estate Corp and Sahara Housing Investment Corp to refund investors with interest, depositing the funds with the capital markets regulator.

In the event that Sebi is unable to locate the whereabouts of subscribers, the Supreme Court said that the collected funds from such subscribers would be appropriated to the Government of India (GoI).

An official told ET that the government could explore the option of transferring the amount to the Consolidated Fund of India with a separate account for investor refunds. The official noted that the dedicated refund account under Sebi has witnessed minimal claimants even 11 years after the judgement.

Another official suggested that the funds could be used for pro-poor programmes or other public welfare initiatives, underlining the need for a separate mechanism for refunding investors.

As of March 31, this year, the total amount recovered from the Sahara Group and deposited in state-run banks was Rs 25,163 crore. In March, Rs 5,000 crore was transferred to the Central Registrar of Cooperative Societies following a Supreme Court decision, specifically for legitimate dues of Sahara Group of Cooperative Societies. A dedicated portal was also initiated for refunds.

According to the latest order, the amount will be disbursed to depositors of the Sahara Group of Cooperative Societies from Rs 5,000 crore at the earliest but no later than nine months from the order date. Any remaining balance will be deposited to the Sahara-Sebi refund account. In July, Union Minister Amit Shah launched a dedicated portal to ease the refund process for Sahara depositors.
 

It may be noted that the Sahara entities had raised funds through optionally fully convertible debentures, which Sebi deemed unauthorised, prompting the regulator to order Sahara to refund depositors.