Government explores legality of transferring unclaimed Sahara-Sebi funds to Consolidated Fund of India

In the wake of Sahara Group founder Subrata Roy's recent demise, the Indian government is reportedly examining the legality of transferring the unclaimed funds from the Sahara-Sebi Refund Account to the Consolidated Fund of India. The move aims to address the lack of claimants over the past 11 years since the establishment of the refund account.

There has been minimal activity from claimants, prompting officials to consider an alternative approach. A potential option under consideration is the transformation of the unclaimed amount into the Consolidated Fund of India, with a separate account designated for refunding investors who come forward at a later date.

In the event that the Securities and Exchange Board of India (SEBI) is unable to locate the claimants or verify their details, the funds collected from such claimants may be appropriated to the government. The funds are anticipated to be earmarked for pro-poor programs or public welfare initiatives, according to the report.

As of March 31, 2023, the total amount recovered from the Sahara Group and deposited in state-run banks had reached Rs 25,163 crore. A sum of Rs 138 crore was disbursed to 17,526 applications involving 48,326 accounts. Additionally, Rs 5,000 crore was transferred to the Central Registrar of Cooperative Societies for disbursement against the legitimate dues of genuine depositors. Home Minister Amit Shah had previously launched a dedicated portal to facilitate the refund process for Sahara depositors.

The late Subrata Roy, a prominent figure in the Indian business sector, faced legal challenges starting in 2010 when SEBI directed two Sahara entities to refrain from mobilizing funds from equity markets or issuing securities to the public. Roy's troubles escalated in 2014 when he was arrested for contempt after failing to appear in a case related to the non-refunding of over Rs 20,000 crore to investors by his companies.

Sahara was directed to deposit an estimated Rs 24,000 crore with SEBI for further refunds to investors. The group contended that they had already refunded 95 percent of investors directly, amounting to what they claimed was "double payment."

Once a sponsor of India’s national cricket team and owner of prestigious assets like New York’s Plaza Hotel and London's Grosvenor House, Subrata Roy was also a co-owner of the former Force India Formula One team. The ongoing deliberations by the government signal a pivotal moment in the resolution of the long-standing financial saga surrounding the Sahara Group.