EXCLUSIVE: IRDAI Declares Sahara Life Insurance Promoters SIFCL, SCL, SICCL and SIHL as Not ‘Fit and Proper’
The Insurance Regulatory and Development Authority of India (IRDAI) has declared four promoter entities of Sahara India Life Insurance Company Ltd as not ‘fit and proper’. IRDAI has also directed these promoter entities to transfer within six months their stake to any other 'fit and proper' promoters.
In its order issued on 30 December 2020, Dr Subhash C Khuntia, chairman of IRDAI,  says, "As the promoters Sahara India Financial Corporation (SIFCL), Sahara Care Ltd (SCL), Sahara India Commercial Corporation Ltd (SICCL) and Sahara Infrastructure and Housing (SIHL) are no longer found to be “fit and proper,” the shareholding by these four entities should be transferred to any other “fit and proper” promoters within a period of six months, subject to the provisions of IRDAI (Transfer of Equity Shares of Insurance Companies) Regulations, 2015."
These four promoter entities together hold 98.19% stake in Sahara India Life Insurance. While SIFCL holds 50%, SCL holds 40% stake in the life insurer. SICCL and SIHL hold 4.37% and 3.82% stake, respectively, in Sahara India Life Insurance.
As per the submission by the insurer to IRDAI, Subrata Roy Sahara and his wife Swapna Roy are substantial shareholders in all the promoter companies. 
In the order, IRDAI observed that the four most significant promoters of the insurer are related group companies and each of those is grappling with its own regulatory or financial issues. Further, it says, “a large portion of the shareholding of the promoter companies is held by Mr Roy Sahara and his wife Swapna Roy, who are the ultimate beneficial owners of SILIC. As submitted by the insurer, transfer of shares among the shareholders inter se have not been registered in the name of Mr Roy Sahara as his demat account has been frozen. SEBI, vide two orders both dated 13 February 2013, has frozen all the bank accounts of Mr Roy Sahara. In this scenario, the ability of the promoters to fund the future capital requirements of the insurer appears highly doubtful.”
"Even otherwise, the financial statements of the promoters do not demonstrate financial soundness or their ability to finance or fund capital requirements of the insurer. As seen from the audit qualifications in the auditor’s report of SIFCL, the company has not provided essential information to their statutory auditors on bank reconciliation statements. There are large scale non-compliances with Reserve Bank of India (RBI) directions or guidelines and the company does not demonstrate acceptable standard of corporate governance to be considered as 'fit and proper'. Thus, it can be seen that none of the four companies that are promoters of SICIL satisfies the 'fit and proper' criteria," the IRDAI order says.
Further, SILIC has been asked by IRDAI to take immediate steps to recover the advance of Rs78.15 crore from Sahara India. "The principal amount should be recovered within a period of three months and the interest should be recovered fully within a further period of one month," the order says.
IRDAI has issued the order after a thorough probe based on the annual report for FY14-15 submitted by Sahara India Life Insurance. It observed three issues in the annual report. In August 2015, IRDAI had sent a letter to the insurer pointing out that the company chairman Subrata Roy Sahara did not attend any of the meetings during the four years ending March 2015 and, thus, it would not be in order for Sahara India Life Insurance to continue with Mr Roy Sahara as chairman of the board of directors and investment committee.
The August 2015 letter says, "The fact that the insurer’s operations had been carried on in the absence of their chairman for the previous four years, raised serious concerns on effective oversight of the board on the activities of the insurer, including its investment decisions; there is  continuing decline in the insurance business of SILIC; and financial transactions valued at Rs78.14 crore leading to transfer of funds to a group entity, despite specific prohibitive directions of the IRDAI."
In its 30 December 2020 order, IRDAI directed Sahara India Life Insurance to "submit a proper board approved 'business plan' within three months; reconcile all the remaining unreconciled bank accounts as on 31 March 2020 within two months and strengthen its internal control systems and conduct its business in accordance with sound corporate governance practices on a continuing basis."
Earlier, RBI and Securities and Exchange Board of India (SEBI) had declared SIFCL as a ‘not fit and proper’ entity. RBI also filed an application for the liquidation of the insurer’s promoter company SIFCL with the High Court of Uttar Pradesh as SIFCL was involved in serious financial irregularities and indiscipline, including transferring funds to related parties rather than repayment to deposit holders from the sale of investments of Rs484.67 crore. 
Further, on 28 July 2015, SEBI had ordered cancellation of certificate of registration of Sahara Mutual Fund as it found the fund house, Sahara Asset Management Company (AMC) and Sahara sponsor, SIFCL not 'fit and proper' to carry on the business.
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    2 weeks ago

    audacity of Roy after bein gin jail for months still indulges in felonies. shows how Govt has been captured to the core

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