Sebi asks Sahara investors to give investment info for refunds

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 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 (Rs 240 billion) 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 (Rs 200 billion) directly to investors and the total outstanding liabilities towards the refund process was less than Rs 5,120 crore (Rs 51.20 billion) 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 their 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.