The Sahara Scam- Lost Investors



  • G.S. Paper 2, 3
  • About the scam
  • Progress of the case
  • Lost Investors of the scam
  • Way forward


  • Very few investors in Sahara’s firms have come forward to reclaim their money despite SEBI’s repeated notices.

About the Scam

  • ‘Sahara vs SEBI’ case involves the issuance of Optionally Fully Convertable Debentures (OFCD) by the two companies of Sahara India Pariwar.
  • The SEBI had the companies to stop issuing the bonds and return the money to investors.
  • OFCD is a type of debt security where the option is given to the bond holder to convert his debenture into equity share after certain time.
  • It argued that hybrid debentures are governed by Registrar of Companies (ROC), under the Ministry of corporate Affairs, from which permission had already been taken.
  • Sahara has claimed that the said bonds are hybrid products, thus does not come under the jurisdiction of SEBI.

Progress of the case

  • The group failed to satisfy the Supreme Court with evidence of the source of funds used to make the claimed return payments.
  • While Sahara contested SEBI’s order in various courts, before the SC pronounced its final verdict, Sahara claimed that it has already paid back 93% of the investors and discharged its OFCD liability to the tune of Rs. 23500 crores.
  • This calls for a thorough probe to reveal all its possible money laundering dimensions.

Lost Investors in the scam

  • SEBI has been requesting genuine investors in Sahara to step forward and claim their money since 2013.
  • But even after 4 years of notice, only Rs.85.02 crores, of this amount has actually been returned to investors.
  • The total amount that needs to be refunded according to SEBI’s estimate now stands at 40,000 crores.
  • Of this, SEBI has received an aggregate amount of about Rs.14,487 crores from the Sahara Group.
  • This obviously raises questions about the authenticity of Sahara’s investor base, which needs to be investigated thoroughly.
  • Sahara’s view that most investors aren’t coming forward as they’ve already been paid stands on weak ground due inherent inconsistencies.

Way forward

  • The Ministry’s rationale for approving Sahara’s initial fund-raising efforts should not be left un-investigated either.
  • Enforcement Directorate must step in to expedite its current probe into the money laundering angle.
  • This will yield better results than waiting for millions of missing investors to turn up.


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