Enough Is Enough, Sahara India!

Enough is enough, declares the full page advertisement by Sahara India Pariwar in the Pune, Sunday edition, of Indian Express. It carries a signed statement and an emotional appeal by its commander in chief, Subrata Roy Sahara, Managing Worker and Chairman: ^^I emotionally appeal my beloved countrymen to come forward and kindly help 10 Lac Law Abiding, Disciplined, Absolutely Honest, Dedicated, ‘Bharat Ma’ Loving people of India^^. This looks like a call for revolution against the tyranny of SEBI [Securities and Exchange Board of India]. But the litany of patriotic adjectives was still deemed inadequate to stop SEBI from doing what it had delayed for long had not the Supreme Court of India forced it into action. As if to frighten SEBI into inaction or silence, the glory of ferocious Bharat Maa was invoked as a fierce Durga to slay evil.
Sahara has launched many such broadsides against SEBI in the past, and the trigger for the latest was provided by SEBI’s appeal to Supreme Court on Friday last to seek ^^arrest of Sahara group promoter Subrata Roy and barring him from leaving the country after two companies of the group failed to comply with court’s order to refund Rs. 24,000 crore to its investors.The market regulator mentioned the matter before a bench headed by Justice KS Radhakrishnan which agreed to hear its plea and posted the case for hearing in the first week of April^^. The order to post the case for hearing in the first week of April has been interpreted by Sahara to mean ^^Ironically, the matter was mentioned before the Hon’able Supreme Court and Hon’able Court did not find any urgency and advised for the listing of the matter in due course, after Holi vacations^^. Posting the matter after “Holi Vacations” is taken by Sahara as a sign of vindication of its stand. The real irony in fact is the dismissal of Sahara’ plea by Supreme Court at the same hearing for more time to process refunds: ^^Earlier, the last hope of Sahara group to get more time to refund Rs. 24,000 crore to its investors was today dashed in the Supreme Court which dismissed its plea and pulled it up for not complying with the court’s earlier order to return the money by first week of February^^. This finds no mention in its capacious advertisement. Is this a case of Suppressio Veri, Suggestio Falsi?
Sahara attempts to keep on the right side of judiciary by piously asseverating, ^^Since, last 34 years we have always very respectfully and genuinely said that our judiciary is above board and we have immense respect and faith in our judicial system^^. Yet, right at the beginning it has observed, ^^FOR ABSOLUTELY NO FAULT OF OURS AT ALL, SEBI is continuously damaging Sahara’s hard earned, clean image, reputation and good will earned in last 34 years, by deliberately framing wrong orders and leaking them to press and electronic channels. Such malafide acts completely destroy the credibility of SEBI and show clearly that it is acting under the diktats of powerful third parties, who are determined to cause irreparable damage to Sahara^^. Who are these powerful third parties? Not a word or a helpful hint from Sahara on this opening gambit. However, everyone knows that SEBI has had to act under the diktats of Supreme Court,  in whom Sahara piously reposes faith, since last year.
The advertisement is not without merit though, because it says at one place that ^^Sahara has deposited TDS on interest paid to the investors on behalf of the two Sahara companies with the Income Tax Authorities. The TDS deposited is more than Rs. 700 crores^^. Sahara doesn’t say true to its character as to when this TDS was paid or to which Financial year it pertains. Thus we have no choice but to assume it pertains to current F.Y. 2012-13. Now, the rate for Tax Deducted at Source [TDS] is 10% above a threshold limit of  a total of Rs. 5000.00 interest paid per depositor or per investor by a deductor in a financial year. Now for a TDS of Rs.700 crores, Sahara would have to shell out Rs. 7000 crores by way of interest payment in 2012-13. Since, this was paid presumably on the Rs. 24,000 crores mobilised by way of  Optionally Fully Convertible Debentures [OFCD], Sahara paid out interest at a rate exceeding 29% of the principal amount. This is an impressive return indeed considering that otherwise the Indian Economy is in doldrums. At the minimum, every such depositor for whom TDS was deposited, would have to invest Rs. 17143.00 to “qualify” for TDS. The maximum number of such depositors will be 1.40 crores assuming each one invested only a minimum of Rs. 17143/-. But Sahara has always maintained that subscribers to its OFCD were in excess of 3 crores individuals. That means additional minimum 1.6 crores individuals invested in OFCD below the threshold limit Rs. 17143/=. But their investments would take the tally of mobilised funds by way of OFCD above Rs. 24,000 crores.   This runs into trouble of making sense out of nonsense, unless, Sahara paid out interest at a rate far in excess of 29% of principal amount so that far less investment than Rs. 24000 crores fetched a TDS deductible interest pay out of Rs. 7000 crores. Subroto Roy Sahara should be asked at what rate he has paid interest on OFCD. If it is say @ 100% or 75% or 50% of principal amount, then he should be put in charge of Ministry of Finance without a moment’s delay. Everyone would want such a patriot to be in charge of our economic destiny when India’s situation is in dire straits.
When one feels one has finally understood Sahara’s figure work, one runs into another trouble. A Prominently Boxed item in the advertisement says, ^^THE FACT REMAINS THAT WE HAVE PAID ALL OUTSTANDING LIABILITIES EXCEPT (LESS THAN) Rs. 5120 CRORES WHICH WE HAVE PAID TO SEBI^^. Again, there is no mention as to when the Rs. 19,000 odd crores were paid back to investors in OFCD or how they were repaid. And if this amount of Rs. 19,000 crores was repaid prior to F.Y. 2012-13, then the interest on OFCD must have been paid at a rate far exceeding 100% of the principal to reach the TDS deductible interest pay out of Rs. 7000 crores.  
Another merit I found in Sahara’s full page paid statement was regarding the *unholy haste* with which SEBI declared to have found only 68 genuine investors:  ^^The Securities and Exchange Board of India has been able to find just 68 genuine investors from among the details of lakhs of investors the Sahara group has sent to its office… SEBI has, for instance, found that in a batch of 20,000 mailers it sent to investors based on details given by Sahara, more than 8,000 were returned by India Post with the stamp “addressee untraceable”^^. This news *unjustly* casts aspersions on the integrity of over 10 lac Sahara workers led by managing-worker, Subroto Roy Sahara, who have conducted such a “massive exercise in financial inclusion”, unprecedented in human history and without a parallel. In Sahara’s words: ^^SEBI knows since we have written so many times that millions of very small investors run their tea stalls, are small vendors etc. etc. who are on highways. Their address may be Mr. X, N.H. 21 Gorakhpur. Millions of rural people do not have House No., Mohalla etc. There are large number of small investors who do not own their houses and have accordingly shifted their address from time to time. Our agent-introducer/ office staff know them very well and can arrange meeting any time with any authority, wherever and whenever required^^. Now, isn’t that an unexceptionable offer to arrange meetings with over 3 crores investors wherever and whenever required?  Surely, yes!, but it suffers from one incongruity. If liabilities of Sahara have been drawn down to little over Rs. 5000 crores from the whopping Rs. 24000 crores, then so must have its small small investors shrunk to 64 lacs or so from over 3 crores.
Yet, Sahara continues to talk even in its latest broadside of crores of investors: ^^to 10 lacs worker’s families, to crores of small esteemed investors… Many many crore families of Hon’able Depositors, Investors, Customers, and Lakhs of Workers (in all, around 28 crores citizens of India have no problem, no grievances against Sahara, then why does the Regulator/ system have it???^^. Who would like to answer that last question? No Problems, No Grievances, No Complaints from around 28 Crores citizens or 1 in every 5 Indian. That is a huge constituency. Either most of those small, small investors have been paid back in full and those who have not been paid the principal are happy with huge interest distribution they have already received; OR those small, small investors did not or do not really exist except on paper. Can imaginary small small investors have genuine grievances?
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One Response to “Enough Is Enough, Sahara India!”

  1. H Goldy. Says:

    Husband and wife duo of Thakur's are at yet another PIL:Lucknow-based Amitabh Thakur, an officer from the Indian Police Service (IPS) and social activist Dr Nutan Thakur have filed a writ petition against Sahara India Pariwar and Subrata Roy for its strange full page advertisements for ‘denigrating’ and abusing a statutory, self-regulatory body and a retired supreme court judge. http://www.moneylife.in/article/saharas-full-page-ads-against-sebi-challenged-in-high-court/31657.html?utm_source=PoweRelayEDM&utm_medium=Email&utm_content=Subscriber%23106437&utm_campaign=Today%27s%20ExclusivesHarkirat Goldy.

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