Legal issues
Being a largely unlisted company Sahara India Parivar's activities have come under criticism largely because of legal issues it is facing.[41]
Since 1990s, the Income Tax Department (IT) asserted that Sahara India Parivar is a money laundering operation. During their investigation, IT officials found many of the names and addresses of the depositors were fictitious. When IT officials asked Sahara to produce 62 depositors, the group could produce only 12 depositors. On 8 February 1997, IT department stated Sahara did not deny that leading politicians deposited their black money with it.[42][43]
On 26 February 2014, the Supreme Court of India had issued warrants to summon Subrata Roy,[44] Managing Worker, chairman and founder of Sahara India Pariwar, on a litigation on the Optionally Fully Convertible Debentures issued by the two companies of Sahara India Pariwar to which Securities and Exchange Board of India had claimed its jurisdiction and objected on why Sahara has not taken permission from it. Sahara has claimed that the said bonds are hybrid product, thus does not come under the jurisdiction of SEBI, instead is governed by Registrar of Companies (ROC) under Ministry of Corporate Affairs, from which the two companies of Sahara has already taken permission and submitted the red herring prospectus with ROC before issuing the bonds.
SEBI in return ordered Sahara's two companies to stop issuing the said bonds and return money to investors. Sahara contested the case in various courts which eventually came to Supreme Court of India. On 14 June 2012, (during the final hearing of the case), the group had provided details of its financials up to 30 April 2012. While the court reserved its order, Sahara claims that it has already paid to 95% of the investors and discharged its OFCD liability to the tune of inr 235000000000 and only around inr 22600000000 are left against which Sahara has already deposited more than inr 120000000000 which has with interest swelled to inr 160000000000. By 31 August 2012 the date of Supreme Court order, the group repaid majority of its OFCD investors between May the last date of hearing and by 30 August 2012 the final order. Since these repayments have not been taken into consideration, Sahara maintains that any money paid now will obviously mean a double payment towards one liability.
It is also been reported that Sahara has paid inr 7259000000 as TDS (tax deducted at source) to the Income Tax Departments on the interest which along with investment was repaid to 95 percent of the investors, between 2009–10 and 2012–13. The income tax authorities had found that the beneficiary investors were existent and accordingly confirmed the repayments made in those particular years. One of Sahara's arguments in the apex court revolves around the fact that if one government body has found investors, why can't the other.[5]
The case itself comprises big numbers such as collection of over inr 240000000000 from three crore individuals, while once in 2013 Sahara sent 127 trucks containing 31,669 cartons full of over three crore application forms and two crore redemption vouchers to SEBI office. Apparently, this had resulted into a huge traffic jam on outskirts of Mumbai, where the regulator is headquartered. SEBI on the other hand because the trucks reached after office hours SEBI rejected the second batch of files, which as per Sahara contained 25% of the investor information.[45]
Furthermore, the market regulator SEBI advertised four times in more than 144 newspapers to ask the investors of Sahara to refund the money. And since August 2012 Sebi has only refunded inr 640000000 to the investors while it has inr 160000000000 from Sahara. In October 2014, a shocking revelation was made when only around 4,600 investors in two Sahara group companies had come forward to claim refunds from the Securities and Exchange Board of India (SEBI), which had asked those who had purchased bonds issued by the entities to claim their money. This gave a valid point to Sahara's argument before courts that it had repaid most of the investors who had come forward to claim the investment which they had made in bonds issued by two group companies.[46]
He was granted interim bail by the Supreme Court on 26 March 2014 on the condition that he would deposit the huge bail amount of inr 100000000000.[47] Subrata was eventually taken into judicial custody and sent to Tihar jail, along with two other Sahara directors, on 4 March 2014 for failing to deposit inr 100000000000 with SEBI.[48] In Tihar jail, Subrata unsuccessfully tried to sell some of his hotel properties to raise inr 100000000000 for his bail bond.[49] He remained in Tihar jail for more than two years, and was released on parole in May 2016 to attend the last rites of his deceased mother.[50]
Roy rejected allegations of misconduct and accused the Indian National Congress of a witch hunt due to his opposition to Sonia Gandhi becoming the country's prime minister.[51]
In January 2017, Income Tax Settlement Commission (ITSC) granted Sahara immunity from prosecution and penalty after the raids it carried out on November 2014 during which the Sahara-Birla Papers listing alleged bribes to politicians were recovered. Rahul Gandhi criticised this Prime minister Narendra Modi over this move and asked, "Immunity for Sahara or immunity for Modiji?"[52]
On 1 July 2018, the group revealed that majority of inr 200000000000 of Sahara's money (including the interest) which is with SEBI will be refunded back to Sahara India as the group had already made majority of the payments to its investors. The group also stated that SEBI will be directed to start the verification of the documents of Sahara's investors, which are already provided to them by Sahara India Pariwar. Despite the double payment for single liability, Sahara India has been continuously depositing money of around ₹20,000 crore (including interest earned) in Sahara-Sebi account.[53][54]
