Subrata Roy died in Mumbai last Tuesday at the age of 75. (File)
Sahara Group founder Subrata Roy's death last week brought to focus the undistributed funds of over Rs 25,000 crore lying with the share market regulator for more than a decade.
What happens to those unclaimed funds? Will the unclaimed money be refunded to the Consolidated Fund of India? Is the government exploring this option after Mr Roy's death last Tuesday?
It will be very premature of the Securities and Exchange Board of India (SEBI) to transfer the money, more so since the process of transferring via the Sahara refund portal is still going on, said government sources.
"We have managed to pay about Rs 230 crore to as many as 2.5 lakh investors. New registrations are still taking place, so it would be premature to say money from the SEBI would be transferred to the Consolidated Fund of India," a senior government official told NDTV.
The centre has been transferring money from the funds lying the SEBI within 45 days of registrations after being verified on the refund portal which was launched by Union Co-operative Minister Amit Shah last July.
Mr Roy started facing problems in 2012 when the Supreme Court upheld a SEBI order instructing the Sahara India Real Estate Corp and Sahara Housing Investment Corp to repay their investors with interest. The court had then asked for Rs 25,000 crore to be invested with the SEBI.
"The court had asked these companies to deposit the money with the SEBI, but since they did not have cash, they raised Rs 80,000 crore via four co-operative societies. Out of this, Rs 25000 crore was transferred to the SEBI and Sahara Group invested the remaining amount in Aamby Valley City," he explained.
The government claimed that they had approached the Supreme Court when the retail investors who had deposited money with the cooperative societies wanted their money back.
Under the court's guidance, Rs 5,000 crore was initially transferred from the SEBI and investors started getting money via the Sahara refund portal. If there is a further need, the government would ask SEBI to transfer more money to the refund portal, according to an official.
"It's an automated, streamlined, and structured process and it is still ongoing. Once completed, then only the legality of transferring the funds to CFI can be examined," he said, adding that this transfer would also include the provision of transferring funds to investors in future.
As many 2.76 crore depositors had invested in four Co-operative societies and 97 percent of them were retail investors who deposited less than Rs 40,000.
Government records suggest most of the investors were from Uttar Pradesh and Bihar. Around 85 lakh investors from UP had deposited Rs 2,200 crore and 55 lakh from Bihar deposited Rs 1,500 crore.
Subrata Roy died in Mumbai last Tuesday at the age of 75 after battling a prolonged illness.