*_The Hindu Editorial – *

It has been about five years since the Supreme Court ordered the Sahara Group, led by Subrata Roy, to refund money that it borrowed from investors without sufficient regulatory clearance. But the Securities and Exchange Board of India, which was tasked by the Supreme Court to oversee the actual transfer of money from the Sahara Group to investors, is clueless about where to find those investors. The total amount, including interest on the initial principal, that needs to be refunded to investors has bulged to about ₹40,000 crore now. Of this, SEBI has received an aggregate amount, including interest earned on deposits, of about ₹14,487 crore from the Sahara Group. But according to SEBI’s latest annual report, as on March 31, 2017 only about ₹85.02 crore, including interest of about ₹38.05 crore, of this amount has actually been returned to investors. As a background to the case, it is notable that Sahara India Real Estate Corporation Ltd. and Sahara Housing Investment Corporation Ltd., entities that come under the Sahara Group, were directed by SEBI in 2011 to return about ₹24,000 crore that they had raised through the issue of optional fully convertible debentures. The entities had collected the money without seeking SEBI’s approval, which led the regulator to order the money to be returned to investors with appropriate interest. The Sahara Group argued that it had sufficient approvals from the Ministry of Corporate Affairs for the issue. But the Supreme Court, on August 31, 2012, upheld the 2011 SEBI order._

_The fact that very few investors have come forward to reclaim their money is bizarre. SEBI has been requesting genuine investors in Sahara to step forward and claim their money since at least May 2013. This obviously raises questions about the authenticity of Sahara’s investor base, which needs to be investigated thoroughly. The Sahara Group earlier claimed that it had already returned 95% of the capital that it borrowed from investors even before the Supreme Court’s 2012 decision — it says this is the reason much of the refund money remains unclaimed. But the Group failed to satisfy the Supreme Court’s request to provide evidence of the source of funds used to make the claimed return payments. It was always clear that the Sahara case was hardly about investor protection, one that could be handled by SEBI. Yet, even as crores of rupees remain unclaimed from SEBI, investigations into the case from the angle of possible money laundering have been slow. The Enforcement Directorate began proceedings in 2014 against the Sahara Group under the Prevention of Money Laundering Act, but has had very little to show for its efforts. The government must step in to expedite a probe into what could be a massive money laundering exercise. This will yield better results than waiting for millions of missing investors to turn up. Finally, the Ministry’s rationale for approving Sahara’s initial fund-raising efforts should not be left uninvestigated either._

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