Rs 25,000 crore question: What happens to Sahara funds? | India News

MUMBAI: Sahara group founder Subrata Roy’s death has left behind a Rs 25,000-crore mystery. Markets regulator Sebi is attempting to return Rs 25,000-crore worth of unclaimed funds to investors.
Legal battles over the money collected by Sahara group from investors through its various schemes, running for years, resulted in the Supreme Court ordering the firm to deposit the money with Sebi in a specific account.
In 2011, Sebi had asked Sahara group firms – Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corporation (SHICL) – to refund money raised in violation of norms through optionally fully convertible bonds.
After the SC upheld Sebi’s decision, the regulator set up an enforcement cell to handle claims from investors. As on March 31, 2023, the total amount deposited in nationalised banks was around Rs 25,163 crore – including interest on the funds recovered from the two Sahara companies.

According to Sebi’s annual report, it has received less than 20,000 applications and refunds have been granted to over 17,000. However, the total amount refunded was just Rs 138 crore. The remaining applications were closed either due to their records not being traceable in the documents/data provided by SIRECL and SHCIL or because no response was received from bondholders on the queries raised by Sebi, the markets watchdog said.
According to former regulators, while these are unclaimed funds, they should go to the government and not to investor protection funds. Given the scale of the funds and the fact that investors could not be validated, the amount could be appropriated by the government. Regulators are not sure how this can be done without legislation.
Earlier this year, the courts directed Sebi to arrange to refund funds to depositors whose funds are stuck in Sahara group’s cooperative societies. The government also launched Sahara Refund Portal for depositors to file claims.
Watch Sahara Group founder Subrata Roy passes away in Mumbai