In 2018, Kanhyalal Jatav, 50, a tailor from Tijara in Alwar, Rajasthan, deposited Rs 100 daily for a year with Sahara Credit Cooperative Society Ltd hoping he would get his principal along with interest from the cooperative society by March 2019. Over a year and countless calls to the Sahara helpline later, Jatav is yet to get his money.
Jatav is one of the 4 crore depositor members of four cooperative societies run by Subrata Roy-led Sahara Group which, as The Indian Express reported Thursday, are under the scanner of the government.
They are accused of fraud and violating rules to collect deposits worth Rs 86,673 crore and invest Rs 62,643 crore in Sahara Group firm Aamby Valley Ltd.
The Central Registrar of Cooperative Societies in the Union Ministry of Agriculture, the regulator of these societies, also received 15,000 complaints from across the country of non-payment of matured deposits in these four societies: Humara India, Stars Multipurpose, Sahara Credit Cooperative and Saharayn Universal.
But this number doesn’t reflect the scale of the problem.
In Ashoknagar district of Madhya Pradesh alone, about 1,000 depositors have filed complaints with the District Collector’s office on non-payment of deposits, District Collector Abhay Verma confirmed to The Indian Express.
On August 24, Verma wrote to the Registrar asking for the cancellation of registration of three of these societies and getting them to repay the depositors. He said that an investigation into the complaints found that many investors have been defrauded after Stars Multipurpose, Sahara Credit Cooperative and Saharayn Universal collected “huge” amounts promising unusually high returns.
“There are 10,000 depositors in my district and we have received about 1,000 complaints of non-payment. We have issued a public notice asking people to report their complaints with us by September 15,” said Verma.
Asked about these complaints by The Indian Express, a Sahara spokesperson said the company’s Grievance Cell was looking into them and in 2019, the company “paid/renewed more than Rs 17000 crore.” The spokesperson added that 20,000 complaints when there were 4 crore depositors was “minuscule… around 0.005% of the total satisfied members.” More than 19,500 complaints have been addressed, the spokesperson said, and “rest are due to non-submission of maturity documents.”
Not just depositors, even Sahara agents who collect deposits, on behalf of the societies, have complained to the Registrar. “The management of Sahara had been changing the name and the nature of the scheme whenever investigating agencies had been tightening the leash on them. They are good at transferring deposits from one scheme to another without taking consent of depositors,” said Mrityunjay Kumar, an agent for Sahara, in an August 1 letter addressed to the Registrar.
Asked about this, the Sahara spokesperson said these were allegations of disgruntled employees who have been expelled and are trying to “tarnish the image of the society.” On the charge that funds were moved from one scheme to another, the spokesperson said: “Our books are always open for inspection/ audit, we follow the laws of land.”
Significantly, though, some depositors in these four societies tracked down by The Indian Express said they had invested money in Sahara Housing Investment Corporation Ltd (SHICL) and Sahara Q Shop Unique Products Range Ltd and their investment was transferred to these cooperative societies after the group ran into regulatory trouble with the Securities and Exchange Board of India (SEBI) and, later, the Supreme Court.
For instance, Manish Sahay Saxena, a depositor from Jhansi, invested in SHICL in 2012. He said when Sahara was locked in a legal battle with SEBI over the deposits, the commission agent transferred his fixed deposit to another firm Sahara Q Shop, which was subsequently transferred to Humara India.
“My deposit matured in May this year and I am yet to get back over Rs 2 lakh. I have complained to the Registrar and also asked Sahara for a refund but they say they will return the money once the Sebi case is closed,” Saxena.
In 2011, SEBI ruled that two Sahara Group firms, Sahara India Real Estate Corporation Ltd (SIRECL) and SHICL, illegally raised over Rs 20,000 crore from 3 crore investors and prohibited them from raising funds from retail investors.
Subsequently, the Supreme Court, in August 2012, ordered the Lucknow-based conglomerate to deposit with Sebi over Rs 24,000 crore collected through issuance of bonds in violation of norms. Interestingly, not many investors have come forward to claim refunds.
Roy was sent to jail on May 4, 2014, for not complying with the order of the apex court, and is currently out on parole.
According to SEBI, the total principal with interest has now crossed Rs 70,000 crore, at 15 per cent interest on the principal amount. Roy has so far only paid Rs 15,000 crore, Sebi told the Supreme Court earlier this year.