Saturday, 8 March 2014

A Primer on Sahara

Way back on  August 31, 2012, the Supreme Court had asked Sahara group companies Sahara Housing Investment Corporation Ltd (SHICL) and Sahara Real Estate Corporation Ltd (SIRECL) to hand over Rs 24,029.73 crore to SEBI, with 15 per cent interest per annum from the date of receipt of the amount till the date of repayment, within a period of three months. SEBI was ordered to return the money after ascertaining the genuineness of each of the 2.96 crore investors and deposit the balance in the government revenue account. 
  1. Sahara group only paid the first tranche of Rs 5,120 crore and defaulted in giving back the remaining amount. But they claimed in December 2012 that they had already paid off the investors Rs 22,885 crore. That is repayment within 4 months—in cash!
  2. The source of these 22885 crore—all cash—is a mystery that they wouldn't disclose even to the Supreme Court.
  3. If we add the accumulated interest, the total repayment from SAHARA would be 37000 crores.
  4. Earlier, they had claimed the deposits with them as private placement from 3.07 crores of friends, families, associates and employees! They first claimed that no general public was involved at all.
  5. Even before the SEBI case, when they first came under the RBI scanner, Sahara companies claimed to be dealing with small amounts deposited by millions of depositors. When the RBI revised the rules for Residual Non Banking Companies (RNBCs) and sought to control its para banking activities, Sahara claimed to haverepaid Rs 73000 crore, four years before maturity, and announced the same through ads. SEBI came into the picture when a Sahara  group company filed a prospectus to go for a public issue of shares and the details included deposits raised by two other Sahara Companies.
  6. After the Supreme Court passed the order, Subrata Roy Sahara, in a full page ad, challenged SEBI for a national TV debate, to settle the matter!
  7. When the SEBI order was passed, depository accounts in India totalled 15 million. The largest company in India today has 4 million investors. Sahara claimed to have 30.7 million!
  8. The latest ad by Sahara talks about 80 million investors. India has about 250 million households. A third of India is below poverty line. That means every second household in India would be a Sahara investor.
  9. Based on investors details submitted by Sahara, SEBI sent out 21000 letters:
  • Only 280 responded.
  • 7000 letters were returned with addressee not found.
  1. The list of investors submitted to SEBI, on a cursory examination, included:
  • 5984 Kalawatis
  • 55 Kalawatis at the same address
  • A Kalawati having the same address as a Mairunnissa, another investor
  • A Kalawati being paid back on the same day multiple times
  • 1433 Anirudh Singhs, all of them S/ O Hukum Singh
  • One depositor's name was Haridwar.
  • An address was Jaipur, Nagpur, Maharashtra.
  • Another address was Aurangabad, Lucknow, UP.
  1. There are numerous instances of:
  • one person having multiple accounts
  • one account having multiple beneficiaries
  • one person with multiple addresses 
  • one address having multiple investors.
  • People whose claimed dues spread over multiple accounts running into crores.
  • Many depositors addresses are untraceable,
  • There were cases having addresses like national highways, and just names of villages with no specific house number etc.
  1. In SC, Saharas deposited a title deed of a 106 acre plot in Versova and claimed its worth at Rs.19300 Crores!! SEBI says it is not worth a penny, because it is in a mangrove and in a no construction zone.
  2. Sahara claims to employ 12 lakh employees. Applying the minimum Act Including PF, ESI, Bonus etc, the cost is 12500 per month. If i were to take different scales, the average would be 25000/month. That would be 36,000 Crores p.a of salaries alone!
  3. And the PF dues on such salaries would be about 5000 crores/annum. EPFO did ask for the details as they scarcely match with their records and Saharas go to Lucknow High Court and start another 'merry go round'.
  4. In an ad recently, they declared a 60% increment across the board. Wouldn't you love to work with them? As Rajnikanth would have said ''Any doubt'?

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