The Securities and Exchange Board of India (Sebi) has begun the process of refund in the high-profile Sahara case.
The money is being refunded only in those cases where Sebi has not found any multiplicity during its verification process. Refund for others will have to wait till the next direction from the Supreme Court, likely to hear the case on July 17.
The refunds are being made from the Rs 5,120 crore deposited by the Sahara group, which claims to have already returned about Rs 20,000 crore to the bondholders of two Sahara firms directly.
This claim of direct refunds, which Sahara says were made before the Supreme Court order of August 31, 2012, is yet to be verified independently, sources said.
Even among the lists of investors given by Sahara to Sebi, after being directed by the apex court to do so, the regulator has come across numerous multiplicities and other anomalies, sources said.
There are numerous instances of one investor being named at hundreds of places. There are also cases of multiple addresses for a single investor and hundreds of investors sharing the same address, sources said.
However, the largest number of anomalies suspected by Sebi involves untraceable addresses and other investor details.
Sources said the refunds were being made to genuine investors, whose credentials have been verified, although the number of such cases is so far very small when compared to initial claims of about 30 million bondholders from whom the two Sahara firms had raised Rs 24,000 crore.
Huge costs for facilitating Sahara refunds
Sebi is believed to have incurred huge costs, including initial expenses of about Rs 56 crore for putting in place storage, scanning and repayment systems, for the humongous task of facilitating a Rs 24,000-crore refund to bondholders of the two Sahara firms after verifying their credentials.
The Saharas will have to foot this huge bill. The final bill in this case could be much higher, as just two contracts — for storage and scanning of investor documents and for providing a platform to facilitate redemption-related services — have cost it Rs 55.85 crore.
Sebi had contracted Stock Holding Corporation of India Ltd (SHCIL) for the work relating to storage, digitisation and scanning of investor documents and for creation of a database. This contract was worth Rs 25.97 crore.
Besides, another contract of Rs 29.88 crore was given to UTI Infrastructure Techn-ology & Services for the work relating to redemption-related activities in this case.
The Supreme Court has also appointed a retired judge to oversee the matter at a monthly remuneration of Rs 5 lakh, in addition to travelling, accommodation and other expenses, all of which are borne by Sebi and recoverable from the Saharas.
All the administrative expenses, including payments to the additional staff and experts, would also be borne by the Saharas.
The Sahara group claims it has already repaid a vast majority of the investors and its total liability towards the bondholders is lesser than the Rs 5,120 crore given by it to Sebi towards the refund process.
After the firms were told by the Supreme Court to hand over the investor documents to Sebi, the group sent 128 trucks with 31,000 cartons of papers to the regulatory authority’s headquarters in Mumbai.