After Subrata Roy’s death, undistributed funds worth over ₹25,000 crore with SEBI come in focus

SEBI's undistributed funds of ₹25,000 cr. come into focus after Subrata Roy's death. Roy's group firms were accused of Ponzi schemes, which they denied. SEBI ordered them to refund money raised from 3 cr. investors. SC upheld SEBI's order & Sahara was asked to deposit ₹24,000 cr. SEBI issued ₹138 cr. in refunds & balance in refund accounts rose to ₹25,000 cr. 19,650 applications received, 17,526 refunded. Centre started process to refund ₹5,000 cr. to 18 lakh depositors of Sahara's 4 co-op societies. SC ordered transfer of ₹5,000 cr. to CRCS. Govt. announced 10 cr. investors to be refunded in 9 months.

The undistributed funds totalling over ₹25,000 crore lying with the capital markets regulator SEBI's account have come back into focus after the demise of Sahara Group's chief Subrata Roy.

Roy passed away in Mumbai on Tuesday night at the age of 75 after battling a prolonged illness.

He faced multiple regulatory and legal battles in connection with his group firms that were accused of circumventing regulations with Ponzi schemes, allegations his group always denied.

In 2011, capital markets regulator SEBI ordered two Sahara Group firms — Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL) — to refund the money raised from nearly 3 crore investors through certain bonds known as Optionally Fully Convertible Bonds (OFCDs).

This order came after the regulator ruled that the funds were raised by the two firms in violation of its rules and regulations.

After a long process of appeals and cross-appeals, the Supreme Court on August 31, 2012 upheld SEBI's directions asking the two firms to refund the money collected from investors with 15% interest.

Sahara was eventually asked to deposit an estimated ₹24,000 crore with SEBI for further refund to investors, though the group has been maintaining that it had already refunded more than 95% of investors directly.