INDIA. Mumbai: In its annual report for 2021–2022, the Securities and Exchange Board of India (SEBI) classified debts totaling Rs 67,228 crore as “difficult to recover” (DTR) at the end of March this year.
From entities, including those that did not pay their fines and those that have not yet refunded investors’ money and did not follow SEBI’s instructions, Rs 96,609 crore must be recovered.
Out of Rs 96,609 crore, the staggering amount of Rs 63,206 crore (which is 65 per cent of the total) pertains to Collective Investment Scheme (CIS) and deemed public issues of Pearls Agrotech Corporation Ltd (PACL) and Sahara Group of companies- the Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL)
According to SEBI’s definition of DTR, these debts are those that remain unpaid even after all available collection options have been used. A change in any of the DTR parameters from the perspective of recovery, however, will not prevent the recovery officers from recovering the sum that has been administratively classified as DTR. This was made clear by the market regulator.
Out of the pending 2872 certificates as of March 31, 472 certificates were certified as DTR, and the total amount under these DTR certificates worked out to Rs 67,228 crore.
The study stated that 59 new cases were opened for investigation and 169 cases were finished in 2021–2022, as opposed to 94 new cases opened and 140 cases finished in 2019–2020. Of the total 59 cases, up to 38 involved price-rigging and market manipulation, 17 involved insider trading, and the other four involved other securities law offences.
PACL
It may be recalled that nearly Rs 60,000 crore (with accumulated interest) are due to over 5.50 crore duped investors of PACL. The R M Lodha committee set up by the SEBI, based on the Supreme Court directions, has been able to refund only Rs.831.78 crore to 18.43 lakh investors till now. Recently the committee has begun the process of refunding claims up to Rs 15,000. The claims will be received till January 31, 2023.
Sahara
As for the Sahara group, around 3.07 crore investors await a refund in the region of Rs 25,000 crore. Till March this year, SEBI was able to refund Rs 138.07 crore( including Rs70.09 crore as principal and Rs 67.98 crore as interest) to 17,526 eligible bondholders.
The Sahara India Real Estate Corp Ltd (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL) collected Rs 25,781.37 crore from the investors through red herring prospectuses (RHP) on optionally fully convertible debentures dated March 13, 2008, and October 16, 2009, of SIRECL and SHICL, respectively.
On August 31, 2012, the Supreme Court handed down a verdict asking SIRECL and SHICL to refund Rs 19,400.87 crore and Rs 6,380.50 crore, respectively, to investors as the funds were illegally raised through quasi-debentures without regulatory clearance.
However, the Sahara Group, in a statement issued in April this year, claimed that the SEBI was holding Rs. 25,000 crores paid by it and in the last 9 years paid only around Rs. 125 crores to the investors. SEBI should act in the interests of the investors and either start paying to the investors or refund that money to Sahara so that we can pay to our investors, the Group had said.
In the meanwhile, SEBI’s “difficult to recover” segregation is expected to sound an alarm bell for the investors.
Also Read: Despite SEBI Restrictions, One More PACL’s Plot of Land Sold Out in Pune
