The refund process for Sahara investors, initiated by the Indian government early last year, has been facing tremendous delays, with a significant number of investors yet to receive any payout from the central registrar of cooperative societies (CRCS) online portal.
With great anticipation from the troubled investors, the cooperative ministry had launched the refund portal on 18 July 2023. At the time, it was announced that if all documents concerning the claim were in order, refunds would be processed in 45 days. Yet, almost a year later, there are many investors whose claims on the portal have been dismissed or rejected for ambiguous reasons.
Moneylife Foundation has been tracking the troubles faced by investors of Sahara’s various cooperative societies and has also hosted a Telegram group for aggrieved investors to coordinate and collectively find solutions to their problems. The group, which was formed during the pandemic, has over 600 members who regularly post about their experiences and share updates whenever one of them receives a refund.
Since the CRCS portal was launched in the past year, the group has been filled with numerous complaints and concerns about the claim process and obtuse error messages that they continue to receive on the portal. While some have complained about common pop-ups such as 'Something went wrong. Please try after some time', others have received a standard response to their claim application that says 'Deficiency Communicated'.
While the investor’s application receives a response that a deficiency has been detected in their application, no communication is being made on resolving such a deficiency.
As Aakash Goel, an engineer, management graduate and chartered financial analyst, who is active on the telegram group and also occasionally assists investors in filing claims, says, “The whole system is a farce. I filed for about 80 people, spending 2-3 hours every night, as the portal is very patchy. Now, with the deficiency messages, everything has to be redone…no reasoning, no explanation and as always – zero accountability.”
At first, the portal would only accept applications for refunds below Rs10,000, followed by a second phase where claims of up to Rs19,999 were accepted. However, the process still continued to be plagued with challenges. Several large depositors, with investments over Rs20,000 are still awaiting for the third phase of the refund process to start.
As of 31 January 2024, only Rs258.47 crore has been paid to 277,000 applicants out of 12.1mn (million) claims filed by depositors of Sahara group’s four cooperative societies through the CRCS portal (Read:
Sahara CRCS Refund: Just 2.77 Lakh out of 1.21 Crore Applicants Received Rs258.47 Crore, Says Govt ). However, this data may not be completely accurate as the number of total registrations on the CRCS refund portal is a staggering 16mn (16,038,266) and the number of claims submitted is an equally astounding 34.1mn (34,115,4180),
as per a response received to an RTI application. (Read: Sahara CRCS Refund Portal Registers Claims of Over Rs82,695 Crore, but Pays Only Rs228.77 Crore, Reveals RTI ).
It has now been over a year since the Supreme Court had ordered a portion of the funds (Rs5,000 crore) retrieved by the Securities and Exchange Board of India (SEBI) to be transferred to the Union ministry of cooperation to facilitate refunds to the investors. The apex court had ruled that the Rs5,000 crore should be paid to the legitimate depositors of the Sahara group of cooperative societies as soon as possible, but no later than nine months from the date of the ruling. Any remaining funds would then have to be transferred back to the Sahara-SEBI refund account.
With the Court-imposed deadline already past, ET Prime reports that the government has requested a six-month extension and that the matter is likely to come up for hearing on 16 April 2024.
The Sahara-SEBI Timeline
In March 2023, the apex court allowed an application filed by the Union government seeking a Rs5,000 crore allocation to pay back to the depositors of the Sahara group of cooperative societies out of the nearly Rs25,000 crore deposited with SEBI.
The Union ministry of cooperation had filed an application seeking directions from the apex court to transfer Rs5,000 crore out of an unutilised amount of Rs23,937 crore (lying in the Sahara-SEBI refund account) to be disbursed against the legitimate dues of depositors of the Sahara group of cooperatives societies.
A bench headed by justice MR Shah and comprising justice CT Ravikumar directed the transfer of Rs5,000 crore from the Rs24,979.67 crore in the Sahara-SEBI refund account to the CRCS to pay it to genuine depositors of the Sahara group of cooperative societies.
Interestingly, Moneylife Foundation had made a similar plea to SEBI in December 2020 since the regulator is sitting on Rs24,000 crore funds collected from the two Sahara realty companies which had issued optionally convertible bonds without regulatory permission over 15 years ago. A landmark order of the Supreme Court in August 2012 forced Sahara to deposit the funds collected with SEBI.
Moneylife Foundation, in a representation to SEBI, had appealed to it to consider returning at least Rs3,000 crore of the Sahara Cooperative Society that was inadvertently transferred to SEBI, according to an order of the CRCS. SEBI did not bother to respond.
Separately, Moneylife Foundation filed three intervention applications in a civil contempt petition case (SEBI vs Sahara No. 412 of 2012), making the same plea before the SC.
In January 2023, the apex court directed SEBI and Sahara India Real Estate Corp Ltd to respond to three intervention applications filed by Moneylife Foundation.
The application has submitted investor data of 240 people collated and verified from the Telegram channel. The total amount claimed by the investors in the list submitted to the apex court is approximately Rs15 crore. These are individuals who are small-time investors who were methodically persuaded to part with their hard-earned money to contribute to various schemes under the Sahara group. The intervention application is also accompanied by affidavits from two investors whose details have been included to showcase the hardship and difficulties the aggrieved depositors face.
