Sahara scam: Centre launches portal to refund duped investors

Union home and cooperation minister Amit Shah on Tuesday launched the Sahara refund portal to begin the process of refunding claims worth ₹5,000 crore of millions of small depositors whose investments were virtually wiped out after the collapse of cooperative societies of the Sahara Group following a scam two decades ago.

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The portal launched by the government will handle claims of genuine depositors, mostly small savers, who lost their money in the scam involving the Sahara Credit Cooperative Society Limited, Saharayan Universal Multipurpose Society Limited, Hamara India Credit Cooperative Society Limited and Stars Multipurpose Cooperative Society Limited, Shah said.

The portal will handle claims of nearly 10.78 million depositors and each depositor will be able to get ₹10,000 in the first phase. Shah said, after vetting the claims, investors’ refunds will be deposited into their bank accounts within 45 days.

The refund process follows a petition moved by the Shah-led cooperation ministry in the Supreme Court on July 17 to begin repaying monies owed to depositors.

Also Read | Centre seeks ₹5,000 cr from SEBI-Sahara fund to settle claims of depositors

The Supreme Court had on March 29 ordered refund of dues through the setting up of the so-called “Sahara-Sebi refund account” via the central registrar of cooperative societies. The government had agreed to use money lying with the Securities and Exchange Board of India (Sebi) to repay Sahara depositors.

The disbursement process will be monitored by a committee comprising Justice R Subhash Reddy, former judge of the Supreme Court, along with Gaurav Agrawal, amicus curiae in the Sahara case, in accordance with the top court’s directions.

“The (Sahara) case went on in the Supreme Court for many years, the agencies sealed their properties and accounts, and with this, the credibility of the cooperative societies also got lost. Prime Minister Narendra Modi formed a separate ministry of cooperation and this matter was discussed extensively with all stakeholders so that genuine depositors get their money,” Shah said.

The Sahara case has gone through a long-drawn process of litigation even as investors ran from pillar to post to get their dues back. In November 2020, Sebi asked the Sahara Group to deposit ₹62,600 crore by adding interest accrued on ₹25,700 crore since 2012.

In June 2022, the financial regulator imposed a ₹12 crore as penalty on two Sahara companies while in December of that year, it ordered the attachment of the demat accounts of the group and its founder Subrata Roy for failure to deposit the penalty

The central registrar of cooperative societies had also ordered the four cooperative societies to stop accepting deposits and repay depositors. The Sahara Group could not honour the repayment orders as it had no funds.

The minister said after payment of ₹5,000 crore, another appeal will be made in the Supreme Court to assess and return the remainder amount to investors.

To claim a refund, depositors will have to download a form from the portal and upload it with requisite documents, along with details of an Aadhaar and mobile number-linked bank account.

“A sub-panel will ensure proper identification of claimants as per the modalities spelt out by the Supreme Court. The complete validation and disbursal will be online and the portal will match membership details with KYC (know-your customer)-validated bank accounts. In case of mismatches, more details will be sought and physical verification will be carried out,” an official said.

While the return of funds to investors is welcome, the authorities will need to do a lot more to ensure that similar scams are not repeated in the future. The Sahara saga also shows the importance of financial literacy and awareness in a country where people can often get duped in the lure of quick and easy returns.

“The settlement process will be better served if the government takes over the Sebi fund since the government itself will oversee the settlement of payments monitored by the apex court,” said advocate Abhay Mathur, a litigant in the case.