Has Sahara started repaying its OFCDs directly?

Has Sahara found a way to get around the Supreme Court order which asks it to refund around Rs 24,000 crore to investors that were raised through optionally fully convertible debentures (OFCDs) issued by two group companies?

The Supreme Court had asked the group to return the money with 15 percent interest, and capital market regulator Securities and Exchange Board of India was to supervise the refund. The money was to be first paid to Sebi, and then disbursed to bona fide investors.

But, according to a report in The Economic Times, several Sahara investors are complaining that they are getting only a part of their dues back, and they are also being asked to park some of the proceeds in the group’s new retail venture, Q Shop.

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[caption id=“attachment_504107” align=“alignleft” width=“380”]  The question is whether Sahara is approaching the investors directly with refunds - which is against the apex court order. Reuters[/caption]

The question is whether Sahara is approaching the investors directly with refunds - which is against the apex court order.

According to the ET report, this is one of the strategies the group has used time and again-phase out a business that is under the scanner and set up another outside the ambit of regulators.

However, a Sahara official has rubbished all the allegations and termed reinvestment a regular phenomenon.

These complaints emerged even as Sebi is struggling to verify details of the 3 crore investors from the tonnes of documents submitted to it by Sahara.

According to an earlier Business Standard report , Sebi has floated tenders to outsource the job of verifying and paying out the money.

In the meanwhile, Sebi has started looking at what Sahara is already up to with its investors. If it is found to be flouting the Supreme Court order, the group could be in for another rap on the knuckles.