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Updated: March 5, 2014 22:42 IST

The man who nailed Sahara

Raghuvir Srinivasan
Comment (65)   ·   print   ·   T  T  
K. M. Abraham
The Hindu K. M. Abraham

When the Supreme Court castigated Sahara Parivar chief Subarata Roy, and sent him to judicial custody on Tuesday, one man must have finally permitted himself a smile — K. M. Abraham, former board member of the Securities and Exchange Board of India (SEBI) and the man who investigated the Sahara scam.

If the case survived the numerous obfuscations, dilatory tactics and twists and turns of the last three years, it was entirely due to Dr. Abraham’s watertight order of June 2011. The 99-page order that he put together under conditions of extreme pressure and stress was scholarly and extremely well-researched at one level even as it brilliantly demolished all the false defences put up by Sahara’s lawyers.

Without saying so in so many words, the order highlighted that the two companies — Sahara India Real Estate Corporation (SIREC) and Sahara Housing and Investment Corporation (SHIC) — may actually have been laundering money in the names of fictitious investors. The Supreme Court alluded to this in its observations on Tuesday. Sahara questioned SEBI’s power to regulate optionally fully convertible debentures (OFCDs), and also contended that the funds were raised through private placements and, therefore, not under the market regulator’s purview. SEBI’s order pointed out that the definition of ‘securities’ under the Securities Contracts (Regulation) Act is an inclusive one and not exhaustive and that OFCDs would come under its purview.

Dr. Abraham’s order also held that an offer made to 50 or more persons ceases to be a private placement under the Companies Act. SIREC alone had about 6.6 million investors in its OFCD scheme. Complete details of these investors were not available with SIREC, and Dr. Abraham’s random test of four addresses of ‘investors’ in Mumbai revealed that only two existed and even these two had nothing to do with the Sahara group. This revelation was important to demolish Sahara’s argument that this was a private placement meant for people associated with the group.

Dr. Abraham’s job was not easy because the data provided by SIREC was in the form of scanned images that were not amenable to analysis on a computer. The other company, SHIC, failed to share any information with SEBI. Not surprising then that he commented in his order: “There seems to be an unstated resolve on the part of the two companies not to part with data in any meaningful manner. The thrust seems to be on concealment and obfuscation rather than openness and transparency.”

It must have been gratifying for Dr. Abraham, who is now Additional Chief Secretary, Kerala, when the Supreme Court quoted extensively from his order in its judgment of August 2012, ordering Sahara to refund its investors. After all the hard work, the pressures that he had to endure and the controversies, it is now vindication time for him.

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India needs more k.m.abrahms to bring out such real cases of bad practice in corporate affairs,more particular in banking sector,PSU contracts,defence contracts,etc.
Proud of your hard work,dedication.Result is immaterial for us.Law will take it's own course.

from:  sham raj
Posted on: Mar 8, 2014 at 19:34 IST

The only part unexplained now is "whose money is it with "Sahara? The
momnent we come down to knowing that we might as well unearth links to
several Swiss bank accounts as a bonus. The new Government should work
in tandem with the S.C in getting to the bottom of this. Arresting just
a man is meaningless to the nation unless we get the Moolah. We might
start off with a presumed list of names of crooks( mostly drawn from the
political establishemnt)and then shortlist them by elimination.I have a
few names in mind :)

from:  Azad
Posted on: Mar 8, 2014 at 18:07 IST

Sir ur the next ashok khemka

from:  piyush
Posted on: Mar 8, 2014 at 15:02 IST

MR. ABRAHAM, CONGRATULATIONS! Mr. Abraham once again proved that no one
can stop a person who wants to bring out the truth. Now being a
Secretary in the State of Kerala will he be able dig out the truth of so
many issues that are causing threats to the nation like scams, etc? We
are with you Mr. Abraham.

from:  PRATEEP BHADURI
Posted on: Mar 8, 2014 at 11:54 IST

God bless you and your family Dr.Abraham. You are a real hero.

Who are those investors(Beneficial Owner) that Sahara is laundering the money for?
That's the 32,000 crore question. Who needs a powerful front face in India? This is
why i think its just a beginning.



from:  Perumi
Posted on: Mar 8, 2014 at 09:53 IST

such honest intellectuals are asset to our powerful democracy and
saviour of public money and trust in democracy,although he is a govt
servant presently,he must be awarded peace time bravery award or some
other which is equivalent honour for such remarkable and examplary
contribution to mankind....may god shower all the happiness and fame to
him.....i am sure will be always quoted in the annals of public service
performance..we cam imagine what kind of offers and pressure he
undergone in this endeavour...i salute u son of india.....

from:  kaushal narayan
Posted on: Mar 8, 2014 at 09:06 IST

Awesome, I want to raise the question like the one from Suresh, why was
he not allowed to continue in SEBI. Maybe they got scared of Mr Abraham,
and transferred him out of SEBI. Hats off to Mr Abraham.

from:  sudha
Posted on: Mar 8, 2014 at 03:39 IST

Heroes come in many sizes and shapes! Kudos Dr. Abraham - you are creating a brave new India!

from:  Krish
Posted on: Mar 8, 2014 at 01:09 IST

How much obfuscation will SC endure? Why isn't Sahara assets ceased, disposed off and all Directors behind bars breaking stones somewhere in UP?

from:  H Mehra
Posted on: Mar 8, 2014 at 00:17 IST

Nature itself takes a very long time to produce men like dr Abraham. This is perhaps in the
political and administrative history of India that some one with such a granite will .has
pursued his mission.Bravo, a hundred times Dr Abraham.

from:  AfaqSiddiqi
Posted on: Mar 7, 2014 at 15:37 IST

Hearty Congratulations to Dr.Abraham for his exemplary work!

There are several corporates who cheats the gullible public. Who will bell the cat in those cases?

from:  P.O. Koshy
Posted on: Mar 7, 2014 at 15:17 IST

Great work Sir! Whole country owes you... This should motivate other
people to find out scams like this...

from:  Sundar
Posted on: Mar 7, 2014 at 15:08 IST

We all know the money what the company earns also with whole heartedness
spends on the right things and supports to the economy largely by
initiating employment schemes, helping the weaker sections and the
affected ones during the misfortunate calamities. Is SEBI fearing of
competitions?

from:  navin patil
Posted on: Mar 7, 2014 at 14:49 IST

Instead of extending the hands for the noble cause, the SEBI always paid
the blame game and remain harsh to the group baselessly claiming the
faulty. After a year SEBI feels the schemes announced were not correct.
How irreverent is that?

from:  supriya
Posted on: Mar 7, 2014 at 14:48 IST

I think if the man is spending so much for the noble causes, then where
the question comes of not refunding its own investors? Sahara Still has
truckload evidence that he has gradually paid back to the investors. Why
SEBI changes its own statement in the parliament and in the Court?

from:  gautam
Posted on: Mar 7, 2014 at 14:47 IST

SEBI had brought contempt proceedings against Roy and Sahara and they
themselves don't know any statistics, they haven't yet repaid the money
collected from Sahara to its investors.

from:  mohan
Posted on: Mar 7, 2014 at 14:47 IST

Mystery is already unveiled! It is just that few critics don't want the
case to be resolved soon. It is just that the case is moving round and
round over the same nexus since 2 years now just because of some, I
really wonder why Sahara is still being so modest? Sahara should knock
the doors of President if the same thing continues for more a month, let
right decision be taken be the right top authority.

from:  reshma
Posted on: Mar 7, 2014 at 14:46 IST

What is going on in NSE and BSE? A SHARE GOES UP 16% AND COMES DOWN 16%.
Is this not gambling? If u were really interested in the safety of
investors u should have only delivery based buying or selling so these
speculations and money loss of small investors would not happen.

from:  kunaal
Posted on: Mar 7, 2014 at 14:45 IST

Ohh, you people feel it’s a great work? It is just a lame thing to
increase the number of pages in portfolio of Mr. Abraham. If he had been
that great then he would have given the sole stats with accurate figures
and their reasons, anyone can write a 100 page book

from:  kareena
Posted on: Mar 7, 2014 at 14:44 IST

He took the case of just
Sahara out of many, there are many pending cases and files that are yet
to be processed, why Abraham overlooked those ones?

from:  saurabh
Posted on: Mar 7, 2014 at 14:43 IST

Thanks Hindu for bring this out...It is indeed admirable act done by Abraham. When we hear scam upon scan done by rich, bringing an impermeable order would have been incredibly hard. Hats-off to you Sir.

from:  kiran
Posted on: Mar 7, 2014 at 13:00 IST

Let me take this occasion to congratulate you Dr. K. M. Abraham from the
deepest recesses of my heart for your achievement in trapping a criminal
who has been hoodwinking gullible poor people by collecting money from
in the name of deposits that they can withdraw once they have hit their
target amount. I feel proud that there are honest people like you who
still live on Indian soil.

from:  Sundaram Chithrampat
Posted on: Mar 7, 2014 at 11:37 IST

Kudos to Mr.Abraham

from:  Gladwin
Posted on: Mar 7, 2014 at 11:11 IST

It is most heartening to read about the exemplary work of bureaucrats like Dr. Abraham against many odds and obstacles. The success on the Indian democratic experiment is partly owed to civil servants like Dr. Abraham. It is people like him who deserve awards like Padma Bhushan or Padma Vibushan more than the corrupt/corruptible and self-serving politicians.

May his breed multiply in the Indian civil service!

from:  Jay Davis
Posted on: Mar 7, 2014 at 05:43 IST

Good job Mr. Abraham. If he manages to win a guilty verdict on this indictment, he
will be our very own Preet Bharara. We need more like him.

from:  Arvind
Posted on: Mar 7, 2014 at 04:40 IST

We should whole heartedly appreciate such honest, sincere and upright officers. It will
enable others to follow his footsteps.

from:  Mohan
Posted on: Mar 7, 2014 at 01:54 IST

As someone mentioned, he should write a book about how he exposed the corruption of the Sahara parivar. I am sure he will find many readers for his book.

from:  Nitya
Posted on: Mar 6, 2014 at 18:16 IST

Indeed, it is heartening to know that Dr. Abraham like personalities
exists. His is rather an unknown story. Thanks to Hindu for bringing out
facts.
Behind every fast money there is a crime. It is not easy to create
asset. Govt need to look into the fast growth of individual / group.
Whether it is Ambani, Mehtha (harshad), it is all same

from:  G.PODUVAL
Posted on: Mar 6, 2014 at 17:50 IST

I met Dr K M Abraham at Kerala Secretariate in 2003 when he was Secretary(Expenditure).It was a time when Kerala was under severe financial strain.Government servants have to produce wedding cards etc to get loans from PF.There was all sorts of recommendations for the loans, but he introduced this system of producing evidences to get loans.I found him very relaxed and people felt justice was done.The very recent disqualification of a Vice-Chancellor who got the post through dubious means is another painstaking work of Dr Abraham.I wish the eulogies will not make him arrogant.Let him continue to be the Abraham as in Bible and Koran.

from:  Dr K V Peter
Posted on: Mar 6, 2014 at 17:06 IST

It is really praiseworthy to read about Sri Abraham. Three cheers for him. A child can kill an ant. But to fight with an Elephant, one need courage,burning desire, guts and more qualities. Mr. Abraham, I salute you from bottom of my heart. Can any govternment which will be formed on 16.05.2014 will have courage to recognise Mr. Abraham with National Honour like Padmbhusan/Padmshree. This will encourage officers/employees to work with honesty & in the interest of public.Can new govt.formed after 16.05.2014 will investigate the case for Money Laundering aspect. Supreme Court has asked to refund by Cheque/DD. Will role models from other walk of life will think twice before praising such personalities. Swami Vivekanad has told that what ever you do, be honest to your duty. Mr.Abraham you have followed Swamiji in this matter. I wish you all the best. Congrates to your family who may have sufferred inconvenience during this period but they are with you.

from:  MAHESH DAVE
Posted on: Mar 6, 2014 at 16:51 IST

After a very long painstaking wait, finally, seeing light while going
through a tunnel once seems unending....As per my views, self style
Sahara Shri should be put in jail with life term imprisonment....also
due money should be realized by disposing his assets...

from:  Krishan Anand
Posted on: Mar 6, 2014 at 16:50 IST

We can atleast now call ourselves Democratic where everyone is
answerable. Great work by Abraham and Supreme court!!!

from:  Selva Arangesan
Posted on: Mar 6, 2014 at 16:42 IST

we salute you for your courage; as it is not easy to fight against
people with money and political clout. Done a good job never loose heart
you may find many tribulations in your journey but never get dejected
keep going one day you will be rewarded.

from:  shaji oommen
Posted on: Mar 6, 2014 at 16:25 IST

Great work of dedication and sincerity. it should be also examined why
was he not given extension in SEBI as he was handling a very important
case on behalf on Indian people

from:  suresh
Posted on: Mar 6, 2014 at 16:10 IST

Nobody dares to involve himself for such a fight against such politically backed white collared thieves. Kudos to Dr.K.M. Abraham. I also request the other authorities like SC, to get investigated the king makers who are behind Subrato Roy and punish them

from:  P.Sree Rama Tharaka Sharma
Posted on: Mar 6, 2014 at 15:36 IST

Bharat Ratna should be conferred on such noble people like Dr. Abraham
than for an undeserved sportsman who was recently given by the political
gimmicks for some petty political gains..

from:  Abilash Aadhikesavan
Posted on: Mar 6, 2014 at 15:23 IST

Is there similarity between Nitin Gadkari's Purti group's modus operandi and that of Sahara group as far as fake investors are concerned? If yes, why politician is scot-free?

from:  Madhukar Dube
Posted on: Mar 6, 2014 at 15:19 IST

Well Done Dr.Abraham. We are happy to note that Honest and bold persons
are still with us.

from:  Narayanan
Posted on: Mar 6, 2014 at 15:12 IST

Proud to be a Keralite !! :)

from:  Tojin
Posted on: Mar 6, 2014 at 15:11 IST

Very happy to read the article and the great work done by Dr. Abraham to bring out the truth. We need many capable persons like him for our country.My personal appreciation and thanks to Dr.Abraham and I hope he continues with his admirable work to ensure that the guilty is punished. God bless Dr.Abraham and I hope and pray that his best work do not go a waste and real parivar is meted out to the public by making the culprit pay for it without any further delay. I also appreciate the tough stand taken by The Supreme Court and I hope the culprit is shown no mercy whatsoever and forced to pay back the dues to the public and if the investors are bogus then the entire amount is seized by the Income Tax Dept and put to good use for public welfare.

from:  V.RAVI SUBRAMANIAN
Posted on: Mar 6, 2014 at 14:27 IST

We want more Abrahams to bring to light the corrupt practises being
followed by these criminals and justice being done soon rather than
waiting for years. See how Sahara treated SC by producing truckload of
documents by confusing them.

from:  G.S.Natrajan
Posted on: Mar 6, 2014 at 14:15 IST

Companies like Sahara thrived, thanks in good measure, to the cricket addiction of Indians. Mr.Roy probably financed lot of movie production in Bollywood as well. Perhaps that explains why many multi-millionaires of Bollywood are coming out in support of him. All patriotic Indians must boycott cricket and Bollywood movies in all forms.

from:  Hareesh
Posted on: Mar 6, 2014 at 14:05 IST

Mr Abraham - hats of to you Sir!

from:  Maj Pankaj Rai
Posted on: Mar 6, 2014 at 13:57 IST

I have had a chance more than a decade ago to meet Dr Abraham. He in fact promised only 10 minutes. But the moment he realised that it was a great scam that was under discussion, the 10 minutes was extended to 90 minutes. And soon Dr Abraham elaborated on his software-related thesis at IIT Kanpur. On reaching the dead of night, I left him, even though he was prepared to spend more time. In the end, Dr Abraham promised that proprietary software is something that needed to be kept out from public services.

from:  RA Jumes
Posted on: Mar 6, 2014 at 13:30 IST

Thank you Dr Abraham. when an average Indian feels helpless, seeing the spate of Himalayan scandals that has shattered nation, people like you are the only ray of hope, that sustains DHARMA. It needs courage of the highest order, to fight against the powerful people, without any backing from a party or organization. An average man will succumb at the very first obstacle.

from:  ganesan
Posted on: Mar 6, 2014 at 13:26 IST

Its good to see honesty and corruption free people exist in India. Who not only preach but also stand up for it. Great work Dr. Abraham. I believe the ruling government should be transparent and strict in their dealings with all major companies and have the companies books audited regularly so as to see their isn't any problems in what they report to public. Every company should be honest and sincere in the operations.

from:  Imran
Posted on: Mar 6, 2014 at 12:50 IST

Painstaking and great detective work by Dr.Abraham,least the Goi can do is recognise his work.He was able to bring out the real face of the Sahara Parivar.Unable understand why the Mumbai filmworld is supporting Mr.Roy.

from:  nadarajan.r
Posted on: Mar 6, 2014 at 12:47 IST

This is such an article the reason,I love to read and follow the The Hindu.
Someone has rightly said that it is more important to do things right (way) than doing (somehow),(just) the right things. Kudos to Dr.Abraham for the excellent job. I cannot agree with Dr. Abraham enough that when you take on the person with 1000s of crores wealth, who has backing of virtually every big politician with enormous clout, what kind of pressure this man might have endured.
Dr. Abhraham please write a book on this silent struggle you had to go thru.
As a citizen Thanks for fighting for us.

from:  rahul bhide
Posted on: Mar 6, 2014 at 12:43 IST

India needs many such integrity persons.This requires unruffled mind
for a good cause.Let us all pray god to give such mind-men at least
for the coming decades.Enough is enough of these sulking/buckling minds.

from:  ramachandrasekaran
Posted on: Mar 6, 2014 at 12:30 IST

Thanks to 'The Hindu', it is heartening to note that individuals like Mr. Abraham still exist and are doing a great job which needs to be show cased. In contrast to the other whistleblowers like Ashok Khemka who have been well covered by the print/electronic media, this story about K.M.Abraham had not been well publicised.

from:  Vaidyanathan
Posted on: Mar 6, 2014 at 11:47 IST

LONG LIVE MR. K.A. ABRAHAM. SUCH PEOPLE SHOULD BECOME AS OUR LEADERS.

from:  Simon Medric
Posted on: Mar 6, 2014 at 11:15 IST

Well done K M Abraham, I am very happy for you and your sincere contribution to India. Salute!

from:  Roy Simpson
Posted on: Mar 6, 2014 at 11:05 IST

People like Mr Abraham should be celebrated by India. He should be
awarded by Indian government.

from:  Rupam Singh
Posted on: Mar 6, 2014 at 10:50 IST

Welldone Dr.Abraham , hope the politicians in Kerala do not kill such talent as the Kerala politics is a minefield where even the best of the talent can be destroyed by the political bunch .

from:  raj
Posted on: Mar 6, 2014 at 10:44 IST

The new Government that will be taking Office in June at the Centre
should nationalize Sahara and appoint Mr.Abraham as its Chief Executive.
Once Subrata Roy is out on bail, he and his chelas will perform all
types of gimmicks and continue to evade payments to crores of small
investors.The issue will gradually lose steam and eventually forgotten
with the passage of time.This should not happen and justice should be
rendered to all genuine investors.

from:  Murali Raghavan
Posted on: Mar 6, 2014 at 09:58 IST

Sir, Hatsoff for your relentless efforts in putting corrupt businessmen
behind bars.This is a great example.Jai Hind.

from:  Arpan Sarkar
Posted on: Mar 6, 2014 at 09:54 IST

an officer worth emulating...

from:  prasad
Posted on: Mar 6, 2014 at 09:54 IST

It is unfortunate and a public loss that the Finance Ministry did not
appoint Abraham as Chairman SEBI.

from:  Hilary Pais
Posted on: Mar 6, 2014 at 09:38 IST

Such great officers should be honoured publicly.He should be given a posting in the Lokpal.
Keep it up Sir!!

from:  Prabhakaran K
Posted on: Mar 6, 2014 at 09:29 IST

SEBI officials need to be applauded for their persistent efforts to expose the misdeeds of the Sahara group. But it must be acknowledged that in the Sahara case it has been possible to book Subrata Roy as the matter went to the Supreme Court.
But it is also likely that SEBI officials may not be in a position to get enough co-operation of In all cases where there are frauds based on violations of law and procedures regarding issue of shares, debentures, acceptance of deposits etc.,
It is also found that officials working in the concerned departments like the State Police and other departments as also the Registrar of Companies are not vigilant enough. Hence it is rather easy to get away without any punishment for frauds. Hence, without implementation of reforms to ensure transparency in the
functioning of govt. departments and its regulatory bodies, we will
have to be satisfied with occasional success as in the Sahara case.

from:  Narendra M Apte
Posted on: Mar 6, 2014 at 08:46 IST

Thank you for the article. It is very inspiring to hear about honest
officers who care for the ordinary investors.

from:  chandrasekaran
Posted on: Mar 6, 2014 at 08:32 IST

Let us salute this man.

from:  K P Natarajan
Posted on: Mar 6, 2014 at 07:43 IST

A true Bharat Ratna. May your tribe increase many fold for a better
Indian democracy. God bless you.

from:  Rajendran
Posted on: Mar 6, 2014 at 07:12 IST

We need more Dr. Abrahams - honest bureaucrats.

from:  Van Ekambaram
Posted on: Mar 6, 2014 at 03:25 IST

SEBI should investigate the reason for the unsolicited support
extended by leading sportsmen,filmstars and others for the cause of
Subroto Roy thoroughly,as there can be some sort of give and take
between them.

from:  S Srinivasan
Posted on: Mar 6, 2014 at 01:45 IST
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