Sebi flooded with Sahara refund calls

The number of calls made by investors has surged to nearly 500 a day and most pertain to the Supreme Court judgement on Sahara, said a senior Sebi official. The apex court on August 31 directed two Sahara group companies, Sahara India Real Estate Corp and Sahara Housing Investment Corp, to refund Rs 24,000 crore (Rs 240 billion) with interest collected from about 29.6 million depositors through the so-called optional fully convertible debentures.

The total refund amount including interest could amount, to Rs 27,000 crore (Rs 270 billion).

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"Hoards of people have been calling our helpline every day inquiring when the refund process would begin and the documentation required to be eligible for the refund," said the official, requesting anonymity.

The apex court has given market regulator Sebi full authority to recover money from the Subrata Roy-led Sahara and set up a mechanism for repayment to genuine investors.

According to sources, Sebi has set up a cell to carry out the herculean task of refunding the money to investors. The cell will be headed by Sebi whole-time member Prashant Saran and he will be assisted by two senior officers.

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The court has also appointed a former Supreme Court judge, B N Agarwal, to oversee the process. The two companies have been mandated to deposit the money with Sebi within 90 days.

However, there has been no time frame set for Sebi to complete the process, given the complexity of the situation. Conducting the refund process is a challenge for Sebi officials as the number of depositors involved is more than the total number of equity investors in the country.

At present, there are a little over 20 million demat accounts in the country.

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"The refund process is of a magnitude never seen before. We at Sebi will have to conduct KYC (know your customer) of all the depositors. We will ask for some documented proof from depositors to make sure they are the genuine and then will immediately refund their money," said the Sebi official.

The official said the Sebi's call centre staff had been trained on salient features of the Supreme Court judgement on Sahara, so that they could explain it to the callers.

The toll-free helpline, available in 14 languages, was launched in January to provide investors with guidance and assistance on various market-related issues.