Subrata Roy's Sahara Group investors untraceable, but search empties Sebi coffers

Mar 14 2014, 17:54 IST
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Sahara group chief Subrata Roy is in the Tihar Jail after the Supreme Court refused to give him bail. Sahara group chief Subrata Roy is in the Tihar Jail after the Supreme Court refused to give him bail.
SummarySubrata Roy's Sahara Group had saddled Sebi with a huge task.

Sebi's quest to locate genuine investors of Subrata Roy-led Sahara Group may be turning largely futile, but the entire process has become a very costly affair for the regulator and its expenses may rise further next year from about Rs 60 crore estimated for the current fiscal.

In the high-profile case involving refund of over Rs 24,000 crore and additional interest of 15 per cent per annum, the Supreme Court had asked the Sahara Group in August 2012 to submit all documents and refund money to Sebi for further repayments to genuine investors after verifying the documents.

Sebi feels that the storage cost payable for the documents submitted by Sahara will go up further in the next fiscal 2014-15 due to receipt of additional documents, such as property title deeds submitted by Sahara, as also due to storage of scanned images, sources said.

The Supreme Court had ordered that all expenses incurred by Sebi in the refund process would be incurred by Sahara Group.

The regulator has now sought a permission to use a portion of Rs 5,120 crore - deposited by Saharas for refund to investors - for settling expenses incurred or to be incurred in the matters for carrying out directions of the apex court.

After months of delay, Sahara finally submitted 5.28 crore documents to Sebi without providing "any authentic database and the documents were dumped at Sebi in a totally haphazard fashion," according to the latest status update of the Special Enforcement Cell set up by the regulator for Sahara case.

Sebi has completed the work of scanning all these documents and has created computer files running into a total size of 70 terabytes (about 20 crore images). A hard disc with such a storage capacity can contain more than three crore songs.

While the scanning job is over, the work relating to data entry may be still continuing, sources said.

While Sahara Group have denied the charges that the documents submitted to Sebi were "hopelessly mixed up", Sebi felt it necessary that all the documents be scanned and a proper database be created to move ahead with the investor verification and refund process.

It was felt that the database would also make the work of refund processing much more manageable, besides covering the risk of damage to the documents.

In this context, Sebi had awarded a contract to Stock Holding Corporation of India Ltd (SHCIL) for storage, digitisation, scanning etc, for an annual contract value

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