When Roy’s Sahara walked on the wrong side of the law, and lost
₹25,000 crore lying with the capital markets regulator for distribution to its investors. Criminal proceedings initiated against Roy, experts said, will be suspended following his death. In 2011, regulator Sebi ordered two Sahara group firms—Sahara India Real Estate Corp.
Ltd (SIREL) and Sahara Housing Investment Corp. Ltd (SHICL)—to refund the money raised from nearly 30 million investors via bonds known as optionally fully convertible bonds (OFCDs). The order came after Sebi ruled that the funds raised by the two firms violated its rules and held (among others) Subrata Roy liable for the same.
After appeals and cross-appeals, Supreme Court on 31 August 2012 upheld Sebi’s directions asking the two firms to refund the money of investors with 15% interest. Sahara was eventually asked to deposit an estimated ₹24,000 crore with Sebi for refund to investors, though the group has maintained it had already refunded over 95% of investors. Retired apex court judge, B.N.
Agarwal was appointed to oversee that the orders are complied with within three months. Criticizing the Sahara group, the Supreme Court had said, “There can...be no hesitation in accepting that...there was a pre-planned attempt at the hands of the SIREC and SHIC to bypass the regulatory and administrative authority of Sebi...But having so concluded, it is essential to express, that there may be no real subscribers for the OFCDs issued by SIREC or SHIC. Or alternatively, there may be an intermix of real and fictitious subscribers." According to the regulator’s latest annual report, the Securities and Exchange Board of India (Sebi) refunded ₹138.07 crore over 11 years to investors of two Sahara group firms.
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