As a prolonged SEBI-Sahara battle continues, the regulator has revised lower the expenditure it intends to recover from the business group to Rs. 25.88 crore in the current fiscal towards money spent on identifying the investors and making refunds.
As per the court orders, Saharas were asked to bear the costs incurred by SEBI in identifying the investors and repayment of refunds to them, which has been an uphill task for the capital markets watchdog.
In its mid-term review of budget estimates for the current financial year 2014-15, SEBI is believed to have pegged the revised estimate of ‘expenses recoverable from Sahara’ at Rs. 25.88 crore, down from the original budget estimate of Rs. 37.66 crore.
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The actual expenditure already made till December 31, 2014, in this financial year stood at Rs 8.75 crore.
This downward revision has taken place largely due to a planned expenditure being revised from Rs. 12 crore to Rs. 4 crore for the current fiscal because of non-operationalisation of a contract given to UTI-ITSL in the Sahara case.
Besides, the advertisement charges have been revised lower from Rs. 3 crore to Rs. 1.46 crore.
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The amount earmarked for in-person verification charges has also been reduced, as the same could not be spent amid subsequent developments in the courts and henceforth a total amount of Rs. 1 crore has been set aside for this particular purpose.
In this high-profile case involving refund of over Rs. 24,000 crore and additional interest of 15 per cent per annum, the Supreme Court had asked Sahara in August 2012 to submit all documents and refund money to SEBI for further repayments to genuine investors after verifying the documents.
Sahara had submitted 5.28 crore documents to SEBI, which set up a Special Enforcement Cell for the case. SEBI had awarded a contract to Stock Holding Corporation of India Ltd (SHCIL) for storage, digitisation, scanning etc, and to UTI Infrastructure & Technology Services Ltd (UTI-ITSL) for refund related activities. These two contracts were originally worth about Rs. 55 crore.
In addition to these contracts, SEBI has incurred significant expenses under other heads also with regard to the Sahara case, including towards legal costs and the in-house refund handling expenses.
Through one of its recent advertisements, SEBI had invited refund applications till January 31 from the eligible Sahara investors along with necessary documentary proof.
Earlier, SEBI had invited refund claims to the regulator by September 30, 2014.