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Five years on, Sebi’s quest to find Sahara bondholders unsuccessful

LiveMint logoLiveMint 27-06-2017 Jayshree P. Upadhyay

Mumbai: Roughly five years ago, the Supreme Court ordered the Sahara Group to deposit around Rs24,000 crore with the Securities and Exchange Board of India (Sebi).

To date, Sahara has deposited Rs11,798 crore, which has grown to Rs14,487 crore on account of interest, with the regulator.

And till 31 March, Sebi has managed to return only Rs85.03 crore to investors, according to two people who have seen the annual accounts tabled by the regulator at its board meeting on 21 June.

The number is believable because Sebi’s annual report for 2015-16 said it had refunded Rs55.72 crore; and its annual report for 2014-15, Rs42 crore.

And so, for another year, Sebi’s quest for Sahara’s elusive investors has remained unsuccessful. This, despite efforts by the regulator, including ads in newspapers, to find them.

“In 2013, a team of Sebi officials were sent to the north and north-eastern parts of the country to find the bondholders and request them to file refund claims,” said the first person on condition of anonymity.

A Sebi spokesperson did not respond to an email seeking comment. A Sahara spokesperson declined comment, saying that the matter was “subjudice”.

The Sahara Group has maintained that it has refunded 95% of the bond holders.

The Sahara case relates to two of the conglomerate’s firms raising Rs24,029 crore from 29.6 million investors. Sebi said the fund-raising violated its public issue norms and ordered a refund in 2011. The order was upheld by the Supreme Court in August 2012.

According to a 23 May Mint report, Sahara’s total dues with interest exceed Rs47,000 crore. In April, the company had given an undertaking to the Supreme Court that it would deposit Rs1,500 crore by 15 June in the Sebi-Sahara account to keep Sahara chief Subrata Roy out of custody. The firm has so far deposited Rs790.18 crore. On 19 June, the apex court granted an extension to the Sahara Group for paying the balance of Rs709.82 crore.

A bench headed by justice Dipak Misra said it would be compelled to send Roy back into custody if the company failed to pay by 4 July.

At that time, Sahara’s counsel Kapil Sibal told the court that the company had sold its London hotel Grosvenor House to GH Equity UK Ltd for £575 million (around Rs4,717 crore) to clear its dues.

Vinod Sharma, official liquidator of the Bombay high court, told the court that terms and conditions for the auction of the Pune-based Aamby Valley project had been filed. On 23 May, Mint had reported that the value of Aamby Valley has been pegged at Rs43,000 crore.

On 17 April, the court had directed the auction of Aamby Valley after Sahara failed to deposit Rs5,092.64 crore with Sebi. On 27 April, the court had accepted two post-dated cheques worth a total of Rs2,000 crore as an assurance of payment from Roy.

The two cheques, dated 15 June and 15 July, were for Rs1,500 crore and Rs552 crore, respectively. Roy will be sent to jail if the cheques are dishonoured.

Sahara has filed a defamation case in a Patna court against Mint’s editor and some reporters over the newspaper’s coverage of the company’s dispute with the Securities and Exchange Board of India. Mint is contesting the case.

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