Asked by the Supreme Court to give bank transaction details of Rs 20,000-odd crore they claimed to have refunded to investors, Sahara group companies on Tuesday said they had transferred cash from one company to the other and had not resorted to banking instruments.
“This is unbelievable stuff,” market regulator Sebi’s counsel Arvind Datar said. He told a bench of Justices K S Radhakrishnan and J S Khehar that contrary to the court’s January 27 order, the Saharas had informed that ”everything was paid in cash” and furnished no bank statement to substantiate transaction of huge amounts of money.
From the five volumes of transaction details furnished by Sahara India, Datar pointed out that Sahara Credit Cooperative Society had paid Rs 13,666 crore in cash on behalf of Sahara Real Estate to Sahara India, while Sahara Qshop had paid Rs 2,578 crore on behalf of Sahara Housing in cash to Sahara India for refund to investors.
“And they claimed that all these monies were returned to the investors in May-June 2012,” Datar said. But the bench said at that time, the two companies – Sahara Real Estate and Sahara Housing – were contesting Sebi’s orders against refund and had never uttered a word about refunds having been made. The SC on August 31, 2012 had directed the two companies to return more than Rs 24,000 crore to investors.
Datar also informed the bench that the Sahara firms had given a DVD with details of refunds, which contained data about the companies having returned Rs 29,878 crore to investors. “Where did the Sahara group get the additional Rs 4,500 crore from,” Datar asked.Taking the court through the details supplied by the Sahara firms, Sebi’s counsel said the daily deposits by investors in various branches of Sahara India, which was collecting money on behalf of the sister concerns dealing with real estate and housing, were transferred to banks.
“So, if the money deposited by the investors on a daily basis was put in the bank, why were the refunds not made through banking instruments,” Datar asked. The bench asked Sebi whether a company was permitted under Reserve Bank of India rules to deal with such huge amounts in cash.
The bench asked Sebi to prepare a flow chart of money transactions as reflected in the documents supplied by the Sahara firms. It also asked the market regulator to examine the saleability of the properties provided as security by the Sahara firms to cover the alleged default in refunds.“You have the title deeds. Check them for their worth and find out whether they are genuine,” the bench said and posted the matter for further hearing on February 20.
The bench had on August 31, 2012 directed Sahara India Real Estate Corporation Ltd and Sahara Housing Investment Corporation to refund Rs 24,029 crore irregularly collected from nearly 3 crore investors.The Saharas have so far deposited Rs 5,120 crore, saying their liability was just a little over Rs 2,000 crore and that they were keeping the rest as adequate buffer in case additional claims cropped up.