Sahara Pariwar: Mysterious Riches, Tall Claims and Struggle To Repay
On 29th September, I wrote about how Sahara Pariwar had apparently raised over Rs1.10 lakh crore in 10 years, during a traumatic phase where the group patriarch had been incarcerated for almost two years by the Supreme Court of India. These sensational numbers came from information put out by two regulators—the Central Registrar of Cooperative Societies (CRCS) and the Securities and Exchange Board of India (SEBI). You can read that report here:
 
A month and half later, the mystery about Sahara’s depositors and the true state of its wealth only deepen, while the government’s reluctance to act decisively gets more perplexing. 
 
Let’s start with CRCS, the apex regulator of cooperative societies. Its joint secretary, Vivek Aggarwal, called for an investigation by the serious frauds investigation office (SFIO), based on the claim that four multi-state cooperative societies of the controversial Sahara group had raised an astounding Rs86,673 crore over 10 years (from 2010)  from around eight crore depositors. This indicates that Sahara has four times the total number unique investors in the Indian market, including the mutual fund industry. Mr Aggarwal’s letter claimed that the central regulator had received 15,000 complaints in eight months from the four cooperative societies from these investors about monies due.
 
Sahara was unfazed. In an email on 6th October, Ghulam Zeeshan, deputy director, Sahara India Pariwar, admitted that there were delays in payments but claimed that all 15,000 people who had complained to the central registrar had been paid. He also said: “We are regularly making maturity (payments) and in the past two to 2.5 months, we have paid maturity of Rs3,226.03 crore (to 10,17,194 Members).” He goes on to say that “total complaint payment is only 2.81% of total payment in that period” and this forms only 0.07% of Sahara’s total investor population which, he admits, to be eight crore. He also claimed that Sahara had made maturity payments of “Rs1,40,157.51 crores to 5,76,77,339 esteemed investors” in the past 10 years. He also assures us that Sahara India has assets that are three times the liability.  
 
 
Despite these mind-boggling levels of fund raising and deployment, Sahara and its bad boy billionaire patriarch never figure among India’s biggest taxpayers, or revenue generators with significantly large noticeable businesses. Most of its operations, except the sponsorship of sporting events media outlets, are largely shadowy.
 
After a flurry of rapid hearings against the four Sahara cooperatives (Sahara Credit Cooperative Society Ltd, the Saharayn Universal Multipurpose Coop Society Ltd, the Humara India Credit Coop Society Ltd and the Stars Multipurpose Cooperative Society) all through the corona pandemic, there are no orders uploaded on its website since 24th September, after Mr Aggarwal’s letter found its way to the media and was widely reported. 
 
The good news is that Sahara claims to have processed payments for 23 investors until 5th November and has paid out a sum of Rs76,85,480. We posted the list of 23 investors on Telegram to seek confirmations. Of these, 18 investors have confirmed receiving payments, but these total up to only to Rs39,64,438. The other five have remained silent.
 
But Sahara India’s usually silent and invisible investors were vocal, this time. As we reported, many took to social media under the hashtag #JusticeForSaharaIndiaInvestors and posted videos and photographs of protests at Sahara offices across the country. One of them wrote a letter to Chief Justice of the Supreme Court, Sharad Bobde, making shocking revelations, which we have published in the article mentioned above. The apex court has not taken note of that letter either. 
 
 
Although the SFIO made no official response to Mr Aggarwal’s letter, it turns out that an investigation had already been opened into Sahara Q-Shop in 2018. In December 2018, the Lok Sabha was informed that a Sahara group subsidiary Sahara-Q Shop Unique Products Range Ltd was being probed by the SFIO following complaints by 744 people. On 29th October, SFIO suddenly turned active again and searched the Lucknow head office of the Sahara group. Business Standard reports that the SFIO has expanded the probe to nine Sahara group companies, including a gold mart and the housing company. A Google search reveals some local cases are also registered against the Sahara chief and his wife for refusing to repay investors. 
 
Moneylife Foundation’s Experiment 
 
 
We decided to follow up on the social media campaign and Mr Zeeshan’s letter to check on Sahara’s claim that investors had been paid through the same social media route, through our not-for-profit organisation Moneylife Foundation. We created a Telegram group for Sahara’s aggrieved investors and asked them to post details of their investment. 
 
This is an open group, which quickly attracted over 150 participants, who were asked to post their investment details in a certain format for easy collation and sharing with Sahara. The number has now swelled to 432. 
 
Our point was: if 15,000 investors have been paid over Rs3,226 crore so quickly, Sahara should be able to dispose a few hundred complaints in a jiffy. Also, since the central registrar claimed that Rs2,300 crore, belonging to Sahara Credit Cooperative society, was paid to SEBI after routing it as an advance to group chairman Subrata Roy, there was probably a case for appeal to SEBI to pay investors of the credit society. On the positive side, Mr Zeeshan was extremely cooperative and assured us that all members of the group would be paid their maturity amounts without pushing people to reinvest the money or transfer it to another group company. 
 
The good news is that Sahara claims to have processed payments for 23 investors until 5th November and has paid out a sum of Rs76,85,480. We posted the list of 23 investors on Telegram to seek confirmations. Of these, 18 investors have confirmed receiving payments, but these total up to only to Rs39,64,438. The other five have remained silent.
 
Our effort led to many interesting findings. 
  • First, there are, indeed, hundreds of investors clamouring for repayment of funds, but the numbers are in hundreds rather than thousands or even lakhs. 
  • Of the 432 members on the group, over 243 investors have submitted all their details and new submissions come in everyday. We sent these to Sahara India in two batches; only the first has been processed so far because some investors had not provided complete information or had mistakes in certificate numbers, etc.
  • Despite the huge effort by my colleagues to collate, clean, compile and provide information to Sahara, only 44 investors’ details are admitted to be complete in all respects so far. Moreover, some investors have received only part payment as yet, despite assurances that they will be paid in full, with interest. The slow and painstaking effort by Moneylife Foundation will continue, so long as Sahara India keeps releasing payments.  
  • We notice that many of these investors seemed to be investing like in a recurring deposit, with money collected by Sahara agents every few days or on a weekly basis. For instance, one investor, who was paid, had 34 separate investment certificates for deposits of about Rs12,000 each. Another investor claimed multiple separate investments (one had Rs40,000+ per certificates) for identical amounts on the same day. A third had maturity payments of over Rs1 lakh each due almost every week.
  • When we noticed large and repeated investments by a single investor, we asked for submission of PAN numbers when the investment was over Rs1,00,000. Many investors have readily submitted PAN and cheque details too. This would suggest that they were so confident of the Sahara group and the higher returns that were offered, that they preferred it to bank term deposits. We learn that Sahara’s network of agents also made the collection of money a lot easier. 
  • Although more investors are submitting investment details every day, what is glaringly obvious is that the numbers and the sums involved are puny compared to the numbers thrown about by Sahara itself and by the regulators. So far, under Rs1 crore. 
  • Sahara India, as a group, claims to employ 44 lakh people across India, which suggests that it would need a more efficient system of processing its monthly salary payments than the method it appears to have adopted to process maturity payments for investors.
 
The gap between perception, claims, allegations and reality is inexplicably wide. At the moment, though, we are happy that some investors are actually getting their money back. Given the poor state of grievance redress in India, where even regulators like SEBI and RBI treat complaints with utter callousness, this is no mean achievement. Wouldn’t this effort be much more efficient and better if the regulators did what we have been doing? After all, they have a legal mandate and public funds to do the work on a much larger scale than what we have done. 
 
 

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    COMMENTS

    ayushgpta798

    5 months ago

    koi adarsh credit co operative society ke baare me kyun baat nhi krta bhala. 21 lakh depositors apna paisa vaapas paane ke liye 2 saal se mar rhe hai aur sarkar so rahi hai.
    na media, na central registrar aur naa aap log. koi nhi sunn rha hai.
    please help us.

    yashpalpatel16

    5 months ago

    sir mera karvy me 202000 ts h payout abhi tak nahi aaya h samaz me nahi aa raha h keya karu

    harineem

    5 months ago

    MonelyLife is doing a great service. In TN we have had chit funds do this again and again and people still fall for it.RBF Nidhi was the most notorious with film actors involved and all of them silent after the implosion(includes wannabe CM Kamal Hassan), would be great if you could do a article on same.

    adityag

    5 months ago

    Good write up.

    sushilprasadassociates

    5 months ago

    This reflects another aspects of Indian financial markets too, eg, the potential for financial savings in the economy and failure of regular banking channels to tap it. Sahara is not unique in this matter - we have had a series of deposit accepting schemes from time to time. Sahara has been able to carry it off for a much longer period.

    REPLY

    kousikdutta80

    In Reply to sushilprasadassociates 4 months ago

    One thing does not understand that 44 lakhs employees of Sahara India are mentioned in what place.
    I have seen 12 or somewhere 14 lakhs employees.

    raviforjustice

    5 months ago

    I can understand the effort that has gone behind this article. Given the poor state of grievance redress in India, where even regulators like SEBI and RBI treat complaints with utter callousness... No doubt, justice delivery system headed by the Supreme Court of India, no less, is not only non existent for the ordinary mortals but they actually add insult to injury for the aggrieved. Whether it is ombudsmen for local self governing bodies, insurance, banks through Human Rights, Women's, Minority, and information commissions to consumer 'courts' they have all been turned into rehabilitation centers for the blue eyed boys of the decision makers. Whatever our judges may claim, justice is a chimera for practically every citizen other than the billionaires.

    tillan2k

    5 months ago

    sahaa i s bold entity it was thumbing the nose to Supreme court even

    Newme

    5 months ago

    There are plenty of Chit funds collecting money in Tamilnadu. I request ML to do a national coverage on their operations.

    amarjitsinghgill2159

    5 months ago

    Iam an investor in sahara companies, please guide me where I can reach to get my amount back from sahara companies,and what documents to attach

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