The news of Sahara Group chairman Subrata Roy’s death earlier this week has worried lakhs of small time investors — including a significant number in Madhya Pradesh, which went to the polls on Friday — who put their hard-earned money into the four cooperative societies run by the businessman.
A portal launched by the Union Minister of Cooperation Amit Shah in July to refund the money of investors — most of whom hail from rural and semi-urban areas across 26 States — has not been effective.
Several depositors whom The Hindu spoke to said that their claims were rejected citing deficiencies such as a mismatch in signature, and absence of data in the records of the parent company, among others.
‘CBI probe needed’
Abhay Dev Shukla, the president of a registered body representing Sahara investors, demanded a probe by the Central Bureau of Investigation (CBI) to investigate the circumstances around Mr. Roy’s death. He claimed that the portal launched by the government was meant to give Mr. Roy an escape route from multiple legal cases against him.
“Except his wife, none of the family members are in India. How will we get our money back? The portal launched by the Union government was only to mislead the people. 99.99% investors have not got the money back. Claims are being rejected on frivolous grounds,” Mr. Shukla claimed. He added that, irrespective of the value of investments, the refund amount has been capped at ₹10,000.
Impact on M.P. voters
Mr. Shukla said there are at least 1.5 crore Sahara investors in Madhya Pradesh; together with their families, they constitute around three crore people. “The Sahara-affected people constitute around 3% population and they are bound to make their presence felt in today’s election,” he said. However, according to the Cooperation Ministry’s record, there are only 13 lakh Sahara investors in Madhya Pradesh.
In Uttar Pradesh, there are 85 lakh depositors who had invested a total of ₹22,000 crore. There are 55 lakh depositors in Bihar, 24 lakh in Jharkhand, 18 lakh in Rajasthan, 20 lakh in Odisha, 14 lakh in West Bengal, eight lakh each in Gujarat and Assam, six lakh in Chhattisgarh, five lakh each in Haryana and Delhi, four lakh in Andhra Pradesh, and three lakh each in Telangana and Maharashtra.
‘One of the biggest jumlas’
Shankar Pandit, a Sahara agent from Muzaffarpur in Bihar, said that the portal was rejecting many claims, stating “no record found”. He pointed out that many people are in dire need of money for medical treatment or for their daughters’ weddings. However, the police stations refuse to register first information reports (FIRs) on the issue.
“Many people died due to natural causes or committed suicide after they stopped getting returns from the Sahara societies. The portal does not have any option for the nominee to claim the funds. It has turned out to be one of the biggest jumlas (empty claims). There are 550 investors in my village; barring a few, all have applied. The government said the money will be credited within 45 days. It has been more than 100 days now; none got the money,” Mr. Pandit said.
On Facebook, a community page by the Sahara Niveshak Morcha, which has 13,600 members, is abuzz with fears that Mr. Roy’s death will further impact the process of their returns.
Lakhs affected
On July 18, the Union government set up the Central Registrar of Cooperative Societies (CRCS) portal — at mocrefund.crcs.gov.in — for small investors in four cooperatives: Sahara Credit Cooperative Society Limited, Saharayn Universal Multipurpose Society Limited, Humara India Credit Cooperative Society Limited, and Stars Multipurpose Cooperative Society Limited. These coops were registered between March 2010 and January 2014, in Lucknow, Bhopal, Hyderabad, and Kolkata, under the provisions of the Multi-State Cooperative Societies Act, 2002.
For the first few years, investors got the promised returns of around 7% to 11%. From the 2017-18 financial year, however, the returns stopped.
The Sahara Group of companies is facing investigations by multiple agencies, including the Enforcement Directorate (ED), since 2008. In March 2014. Mr. Roy had even been arrested by the ED following an investigation done by the Securities and Exchange Board of India (SEBI).
Amid allegations of money laundering, in 2012, the Supreme Court ordered Sahara to deposit ₹25,000 crore in a “Sahara-SEBI Refund Account”, to refund the high-net-worth investors of two other companies: Sahara India Real Estate Corporation Limited (SIRECL), and Sahara Housing India Corporation Limited (SHICL).
Refunding small depositors
According to SEBI’s annual report, over the past 11 years, it has issued ₹138.07 crore in refunds to 48,326 accounts in response to 17,526 applications by the investors of the two Sahara Group firms. Most high-net-worth investors never showed up to claim the money. The corpus of ₹24,000 crore still lies unused.
The Ministry filed a petition in this regard before the SC, seeking ₹5,000 crore from the unused corpus of the Sahara-SEBI refund account to refund the small-time depositors. The court agreed to the Ministry’s suggestion on March 29.
The Ministry officials did not respond to queries from The Hindu on how many investors have been refunded so far.
Re-submission of claims
A few days ago, a “re-submission” option was made effective on the portal, saying: “The applications submitted in CRCS-Sahara Refund Portal have been processed and payment upto ₹10,000 or less per application has been paid to eligible depositors, whose claims could be verified. For depositors whose claim could not be verified due to deficiencies in their claim, deficiency messages have been communicated... This Portal has been launched for re-submission of claims after rectification of deficiencies.”
The re-submissions are to be made in three phases. The first phase, which started on November 15, is for claims upto ₹10,000. The second phase will be effective from November 25, for claims up to ₹19,999. The dates for the third phase, for any amount above ₹19,999, will be communicated soon.
