The Telegraph
Saturday , September 1 , 2012
Since 1st March, 1999
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Govt to gain from untraced accounts

New Delhi, Aug. 31: The government may reap a bonanza if the Sahara Group cannot track down all the investors — estimated at over 2.96 crore as on August 31, 2011 — who had put their money in the hybrid issues floated by the two unlisted companies.

The Supreme Court ruling makes it clear that if investors can’t be traced because of the poor record keeping by Sahara firms — Sahara India Real Estate and Sahara Housing Investment — the refunds will go into the government’s coffers.

“If the Securities and Exchange Board of India, after the verification of the details furnished, is unable to find out the whereabouts of all or any of the subscribers, then the amount collected from such subscribers will be appropriated to the Government of India,” the apex court’s order said.

It is further suspected that there may be a long list of fake or benami investors. As an example, the Supreme Court brought up a specific case of one named Kalawati whose address did not mention either the house number, street or locality nor her husband or parent’s name and identifies her introducer as Haridwar.

“Despite restraint, one is compelled to record, that the whole affair seems to be doubtful, dubious and questionable. Money transactions are not expected to be casual, certainly not in the manner expressed by the two companies,” the judgment said.

Though Sebi sources could not comment on the amount of money that might go into the government coffers, they said it would be a substantial chunk. Marketmen were, however, more concerned about how Sahara would raise the huge amount of cash needed to comply with the Supreme Court ruling.

Sebi, in its order on June 23, 2011, had said, “Going by the financial statements, the two companies do not have adequate fixed assets to secure their OFCD issuances, even if they choose to do so.

In other words, the magnitude of fund raising through these unsecured vehicles exceeds the assets of the two companies by far.”

Though the Sahara Group is known to have deep pockets, analysts believe the huge payout can impact its ongoing plans. Sahara recently tied up with US-based Turner Construction Co to build townships across the country. The group also launched a retail chain project, Sahara Q Shop, for which it plans to initially invest Rs 3,000 crore.

It is also believed to be in talks with another US-based group — Oasis West Realty — to buy a majority stake in upmarket Beverly Hilton hotel in Los Angeles for about $340 million.

A couple of months back, Sahara chief Subrata Roy flew down to Dhaka to ink a memorandum to set up a new Dhaka township whose construction could involve spending of upwards of Rs 10,000 crore.