Sebi makes fresh bid to find Sahara investors for refunds

Sebi makes fresh bid to find Sahara investors for refunds

Making a fresh bid to locate Sahara investors eligible for refunds, capital markets regulator Sebi has asked the bondholders of two Sahara firms to submit their claims along with the proof of investments.

The latest exercise follows two similar attempts made by the Securities and Exchange Board of India (Sebi) in the past.

The first exercise began in August last year, when the investors were asked to submit their refund claims by September 30, followed by a similar exercise in December when the bondholders were required to approach Sebi with their applications by January 2015.

There is no specific deadline as yet in the latest attempt by Sebi, which has been asked by the Supreme Court to refund money collected from the bondholders of Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL), after verifying the credentials of the investors.

While the details of the second exercise to locate eligible investors could not be ascertained, Sebi had received 4,900 refund claims in its first attempt last year from the bondholders of two Sahara firms, which had raised Rs 25,780 crore from about three crore investors.

While Sahara firms were asked to deposit the money with Sebi for further repayment to the investors, the group claims to have already refunded about 95 per cent investors directly. The group has, however, already deposited over Rs 12,000 crore in the Sebi-Sahara Refund Account, although the regulator has been able to repay only a small amount to investors as yet.

Sahara Chairman Subrata Roy, as also two top executives, have been in Tihar Jail for more than a year and the group was asked by the apex court to deposit Rs 5,000 in cash and bank guarantee for a similar amount for their release. While a portion of this amount has been deposited, the group is exploring sale of further assets to arrange funds.

Recently, Sahara also backed Sebi's claim before a US court to bring back nearly USD 13 million from sale proceeds of a business jet of the crisis-hit group.

In fresh public notices, Sebi has again asked the investors holding Real Estate, Abode and Nirmaan Bonds of SIRECL, as also those holding Multiple, Income and Housing Bonds of SHICL to submit their applications along with the necessary documentary proofs for the refund.

When contacted, a Sahara spokesperson said the group has repaid around Rs 23,000 crore to the bondholders directly, still it has already deposited more than Rs 12,000 crore to Sebi's refund account.

The group further said Sebi could repay only about Rs 2 crore after three rounds of media advertisements across 50-60 publications that resulted in total demand worth about Rs 20 crore, as most of the investors have already got back their money. 

The one-page application, in a prescribed format, would need to be accompanied by the original bond certificates or passbooks, self-attested copies of identity and address proof and a self-attested copy of the first page of a bank account passbook or a cancelled cheque leaf. The refund amount would be credited to the bank account of the investor, Sebi said.

The income tax will be deducted at source, wherever applicable, unless the application comes with the necessary tax exemption proof.

The refund form requires the applicant to fill name, address, contact details, PAN (if available), details of investments and bank account details, among other things.Sebi began the refund process in May 2013, while asking eligible investors to submit their claims. However, the refunds made so far remain minuscule, although the regulator has not made public the quantum of all such payments.

Sahara maintains that Sebi should verify its direct refunds and it has submitted proof for nearly 75 per cent of refunds. It also says that the remaining 25 per cent refund proof was lying in its Mumbai godown to be given to Sebi.

Sahara also contends that bulk of its investors didn't have bank accounts and other formal financial papers, the details of which have been sought by Sebi.

On the identification on Sahara's investors, Sebi has contested in the court that addresses of many investors given by Saharas were incomplete as only village name, district and state is given without any house number or street/lane names.On its part, Sahara has maintained that most investors are from rural India and had no house numbers or street names.

In the new refund application form, Sebi has given a new address format for rural investors, asking only village name, post office, district and state as against additional details like house number and street name for urban addresses.

The bondholder is also required to give an undertaking, attesting the details in application form with signature or a thumb impression, to return the money along with applicable interest if the declaration subsequently proves to be false.

In its last annual report for the year ended March 31, 2014, Sebi had disclosed having received 3,612 refund applications involving 13,948 deposit accounts till that time in the Sahara matter.

Of those applications, Sebi made refunds in case of 445 applications involving an equal number of deposit accounts for an aggregate amount of about Rs 1.25 crore including interest of about Rs 43.83 lakh. The other applications had deficiencies or fell under either 'mismatch' or 'multiple investment' category.

"Out of the remaining 3,167 applications, in respect of 424 applications involving 1,683 deposit accounts, certain deficiencies were observed in the applications/supporting documents submitted by the applicants which were brought to the notices of the applicants for their  clarification/ rectification, and replies are awaited from them," Sebi said. 

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