Government Reports: Only 2.77 Lakh of 1.21 Crore Applicants Receive Rs258.47 Crore in Sahara CRCS Refunds

Recent revelations shed light on the disbursement of refunds to depositors of Sahara group’s cooperative societies, revealing discrepancies between official government figures and those obtained through a Right to Information (RTI) inquiry.

While the government claims to have disbursed Rs 258.47 crore to 277,000 applicants out of 1.21 million claims filed, the RTI response paints a much larger picture: over 16 million registrations and 34.1 million claims submitted on the CRCS refund portal. This stark contrast not only raises questions about the accuracy of the data but also shows the magnitude of the refund process and the challenges it faces.

Pankaj Chaudhary, Minister of State for Finance, said that the disbursement process is closely monitored by former Supreme Court Justice R Subhash Reddy. Currently, payments are capped at Rs10,000 per genuine depositor and are facilitated through Aadhaar-seeded bank accounts.

The four credit cooperative societies involved in this process are Sahara Credit Cooperative Society Ltd, Saharayn Universal Multipurpose Society Ltd, Humara India Credit Cooperative Society Ltd, and Stars Multipurpose Cooperative Society Ltd.

Also Read: CRCS Sahara Refund Portal, Claim form ,Login, Registration Process & Status Check

The Supreme Court’s involvement in this matter dates back to March 2023 when it directed the allocation of Rs5,000 crore to repay Sahara group depositors from funds held by the Securities and Exchange Board of India (SEBI). Following this directive, Rs5,000 crore was transferred from the Sahara-SEBI refund account to CRCS for disbursement, under the vigilant supervision of Justice Reddy.

These recent developments underscore the complexity and challenges surrounding the refund process for Sahara group depositors. The discrepancies between official figures and RTI disclosures raise concerns about transparency and accountability in the handling of such significant financial matters.

As the disbursement continues under supervision of Justice Reddy, it remains to be seen how effectively and efficiently the legitimate dues of depositors will be addressed.

Overview of The Sahara Scam

The Sahara Scam came to light when chartered accountant RoshanLal from Indore raised concerns with the National Housing Bank (NHB) regarding discrepancies in housing bonds issued by Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC), both headquartered in Lucknow. Subrata Roy acknowledged that the bonds did not meet new requirements.

Due to a lack of jurisdiction, NHB forwarded the complaint to the Securities and Exchange Board of India (SEBI). SEBI, upon reviewing the draft red herring prospectus prepared by the companies for raising funds for Sahara Prime City Limited through an IPO, initiated an investigation. The Professional Group for Investor’s Protection from Ahmadabad also approached SEBI with similar concerns.

SEBI’s investigation revealed that SIREC and SHIC had increased their capital pools by 4,000 and 32,300 crores respectively over the past four years without proper accountability. Despite being issued a show-cause notice, the companies failed to justify these financial transactions. They were found to be raising significant sums from the public using Optionally Fully Convertible Debentures (OFCDs) as per their prospectuses.

Sahara Prime City, another Sahara India Pariwar group company, registered a lengthy 934-page red herring prospectus for issuing debentures, disclosing tax disputes with the Income Tax Department amounting to Rs. 34 crores. Additionally, between April 25, 2008, and April 13, 2011, it issued OFCDs against the prospectus guidelines.

The company also conducted Initial Public Offerings (IPOs) during this period, accumulating Rs. 17,656 crores in revenue from around 30 million contributors. However, it failed to inform SEBI, the market regulator, about these transactions. By the end of 2009, the company’s liabilities reached Rs. 20,000 crores.

The Reserve Bank of India intervened, ordering the company to cease debenture issuance and initiate winding-up procedures. This marked the beginning of a larger problem. In summary, the company faced allegations of financial fraud and money laundering.

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