Sahara justifies Rs 20,000 cr cash dealings; blames Sebi for refund delay

Under fire for claiming it hasrefunded thousands of crores of rupees to investors in cash,the Sahara group has said such large-scale dealings were possible with its vast network of branches.

The group also sought to shift the blame to Sebi fordelaying the refund to investors, while saying that its cashtransactions were based on a “strict, convenient, safe andcost-effective policy.”

The Supreme Court on Tuesday asked how Sahara hadtransacted only in cash while purportedly refunding Rs 20,000crore. The court made the observations after Sebi said thegroup had not furnished any bank statements to support therefunds to investors, claiming the amount was paid in cash.

After a brief hearing, the court adjourned the case toFebruary 20.The group said in the statement today that it had put inplace the cash policy after hundreds of cases of “snatching,robberies, injuries” and even death faced by its workers whilecarrying money between branches and banks.

Blaming Sebi, Sahara said the regulator “does not want tounderstand the spread of our network into 4,700 centres” andthe average daily payment at each branch of about Rs 2.5 lakh.The long-running case relates to the refund of over Rs24,000 crore to investors by two Sahara firms through Sebi.

Sahara deposited Rs 5,120 crore with Sebi and claimed thatmore than Rs 20,000 crore was returned directly to investorswho had subscribed to bonds issued by the two firms.Sahara claimed that in the past 17 months, Sebi hasrepaid about Rs 70 lakh out of the Rs 5,120 crore deposited.It claimed Sebi had not initiated verification of evenone of the 3 crore investors in the past 17 months and hadavoided reporting the valuation of asset details submitted bySahara. The group welcomed the court’s direction to Sebi tocome out with the valuation report.

Stating that the image and credibility of Sahara, where12 lakh families earn their livelihood, have been “severelyaffected,” the group said most of its investors were small andthe average bond investment amount was Rs 8,000.In the detailed statement, the group claimed almost 98
percent of its investors had put in amounts ranging from Rs500 to Rs 19,000.Most of these people do not go to banks. These investorsdeposit cash and want to take back cash, Sahara said,justifying its cash dealings with them through “more than4,700 offices with lakhs of workers” across the country.

The group said it has adopted a policy wherein the entire"Sahara India" was considered to be one and money inflows fromdifferent businesses in a single day were first used for allpayments of that day and then the final settlement was done atthe headquarter level.Sahara said such a policy for cash dealings within thegroup was followed after a few workers who used to carry moneybetween branches and banks had lost their lives.“It happened hundreds of times where these workers facedsnatching, robberies, few had died, many had serious injuriesand many more had minor injuries. Our workers always feelscared to take money to deposit into the bank or from bank tooffices and it is definitely not possible cost wise to provideone-two gunmen at more than 4,000 branches.

“If the policy would have been to get all the collectedmoney from branches to headquarters and then again send backto the branches for payments, it would cost us a huge amountof bank charges and also loss of interest would have been verybig amount,” the group said.
Claiming that only about 50 percent of the Indianpopulation had access to bank accounts, it said Sahara Indiais a “partnership firm” with infrastructure throughout thecountry.

PTI