SEBI takes a dig at Sahara refund claims
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SEBI takes a dig at Sahara refund claims

Last Updated: Wednesday, April 03, 2013, 19:55
 
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SEBI takes a dig at Sahara refund claims
Mumbai: In an apparent dig at Sahara group's claims of having refunded money to most of their investors, Sebi Chairman U K Sinha on Wednesday questioned the credibility and feasibility of such claims and called for a unified approach to check illegal raising of funds from the public.

"There is a famous case. I need not name it, but there is this particular company that claims to have returned more than Rs 20,000 crore to their so-called investors and more than 90 percent of this refund has been made in cash in the last 3-4 months.

"I want you to ponder over it and think how feasible, how credible this story can be," Sinha said a seminar here.

Sebi is engaged in a long-running case against two Sahara group firms, who were asked last year by the Supreme Court to refund over Rs 24,000 crore raised through issuance of certain bonds to an estimated three crore investors.

Sahara group claims that it has repaid a major chunk of investors and its total outstanding liability is less than Rs 5,120 crore already given to Sebi towards the refund. Sebi has been asked by the apex court to facilitate the refund after ascertaining the genuineness of investors.

The regulator has already passed attachment orders against the two companies and their top executives, including Sahara group chief Subrata Roy. Sebi has also asked them to provide a list of their assets that could be sold to meet the refund obligations and has summoned Roy and others for personal appearance on April 10.

Speaking at a seminar on investment outlook for 2013, organised by the Indian Merchants' Chamber at BSE here, Sinha also said that the companies are coming up with various "innovative" products to dupe gullible investors.

"There are investment schemes for farming of Emu birds, there are goat-rearing schemes... They are raising hundreds to thousands of crores of rupees from the public," he said, while stressing on the need for a single regulator to deal with all the companies raising money illegally through public deposits.

"When the collective investment scheme (CIS) was brought under Sebi Act, certain exceptions were given to Nidhi, chit funds and co-operatives which were kept out. But today certain people are taking advantage of those well-thought-out, well-intentioned exceptions."

"The purpose of my mentioning the CIS is that the volume now is quite large. So, we all have to work together," he said.

Currently, cooperative banks and deposit-taking NBFCs are regulated by the RBI, while chit-funds are under the purview of the state governments.

Noting that the public have started agitating against illegal companies raising money in many parts of the country such as Alipur, Durgapur and Cuttack, Sinha said when people start resisting, the state governments will be forced to act.

PTI



First Published: Wednesday, April 03, 2013, 19:11


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