Mumbai: Speeding up the refund process in the high profile Sahara case, market regulator Sebi on Tuesday asked 'genuine investors' of two Sahara firms to provide their personal and investment details to get back money directly into their bank accounts.
A bank account is a must to get the refund and those without it have been asked by Sebi to open an account with a scheduled bank. The money would be refunded after verification of documents submitted by investors and the claims would have to be made in a format devised by Sebi for the refund purpose, the regulator said in a statement.
"As per the order of the Supreme Court dated May 8, 2013, Sebi (Securities and Exchange Board of India) has initiated the process of refund to the genuine investors who have submitted/would be submitting their claims in the format, after verifying the genuineness of the documents," Sebi said.
The case relates to refund of an estimated amount of over Rs 24,000 crore raised through 'various illegalities' by two Sahara firms, Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHCIL), by issuance of certain bonds.
The Supreme Court has asked Sebi to facilitate the refund to the genuine investors of the two firms after verifying their credentials. Saharas were asked by the court to deposit with Sebi the entire money raised by them, so that the regulator can make the repayments to investors.

However, Saharas claim that they have already refunded more than Rs 20,000 crore directly to investors and the total outstanding liabilities towards the refund process was less than Rs 5,120 crore deposited so far with Sebi.
While the court is still to decide on this claim made by Saharas, it asked Sebi on May 8 to refund the money so far deposited with it to genuine investors. The regulator said as far as genuine investors with multiple deposits are concerned, their claims would be kept on hold till further directions from the Supreme Court.
The details sought from the investors in their refund application form include names, addresses, Sahara account numbers, number of bonds, amount invested and mode of investment (cash, cheque or draft).
The investors have also been asked to provide their photographs, ID proof, address proof, bank account details and their original bond certificates. The bond holders have also been asked to furnish a bank certificate in a prescribed format, giving details for electronic transfer of money to their accounts.
"Please note that the refund amount will be directly credited to the bank account as mentioned in the certificate. In case bond holders do not have a bank account, they are advised to open a bank account and obtain a certificate for receiving the refund amount," Sebi said.
The investors have also been asked to provide relevant documentary proof if there has been any change in their address or marital status since the time of their investment. Besides, Sebi said that income tax will be deducted at source, wherever applicable, unless a prescribed form to claim exemption from deduction of tax at source is received along with refund application in accordance with the relevant provision of the Income Tax Act.

Also, PAN would be compulsory for claiming exemption from deduction of tax at source. Sebi is already believed to have incurred huge costs, including initial expenses of about Rs 56 crore for putting in place storage, scanning and repayment systems, for the humongous task of facilitating Rs 24,000—crore refund to bondholders of two Sahara firms after verifying their credentials, for which Sahara has to clear the bills.
The regulator had contracted Stock Holding Corporation of India (SHCIL) for the work relating to storage, digitization and scanning of investor documents and for creation of a database.
This contract alone was worth Rs 25.97 crore. Besides, another contract of Rs 29.88 crore was given to UTI Infrastructure Technology and Services for the work relating to redemption related activities in this case.
The Supreme Court has also appointed a retired judge to oversee the matter at a monthly remuneration of Rs 5 lakh in addition to travelling, accommodation and other expenses, all of which are borne by Sebi and recoverable from Sahara.
Sahara group claims that it has already repaid a vast majority of the investors and its total outstanding liability towards the bondholders would be much less than Rs 5,120 crore given to Sebi towards the refund process.

After Sahara firms were told by the Supreme Court to hand over the investor documents to Sebi, the group sent 128 trucks with more than 31,000 cartons of papers to the regulatory authority's headquarters in Mumbai.
Finding it impossible to store them at any of its offices, Sebi decided to keep them at a warehouse of SHCIL Projects Ltd, a subsidiary of SHCIL. In its order dated August 31, 2012, the Supreme Court had allowed Sebi to engage investigators, other experts and supporting staff for investor verification and the refund processes. The court had also ruled that all these expenses would be borne by Sahara and be paid to Sebi.


Latest News from Business News Desk