Sahara: Registrar of cooperatives seeks SFIO probe; Group refutes charges

Topics Sahara | SFIO probe

Alleging irregularities, the Central Registrar of Cooperative Societies has sought a probe by the Serious Fraud Investigation Office(SFIO) into investments made by four cooperatives associated with the Sahara group from over Rs 86,600 crore collected by them, but the credit societies refuted the charges and said all their investments have been made as per the law.

The societies also said they have contested the allegations at the "appropriate forum".

In a letter written to the Corporate Affairs Ministry, the Registrar said it had received more than 15,000 complaints from depositors and members of the four credit cooperative societies -- Sahara Credit Cooperative Society Ltd, Saharayan Universal Multipurpose Society Ltd, Humara India Credit Cooperative Society Ltd and Stars Multipurpose Cooperative Society Ltd.

The Registrar said it summoned the management of the four societies and found after its further probe that all the four societies were under common management of the Sahara group and had collectively garnered Rs 86,673 crore, including more than Rs 47,000 crore collected by Sahara Credit Cooperative Society Ltd from nearly 4 crore depositors.

It further said that the information furnished by the management of the four societies showed that a total amount of Rs 62,643 crore was invested in Ambey Valley Limited by the four societies from their total deposit.

When asked for their comments, a spokesperson for the cooperative societies said, "We invest our money as per the provisions of our bye-laws which were approved by the Central Registrar of Cooperative Societies" and in consonance with the relevant provisions of the Multi-State Cooperative Societies Act.

The spokesperson further said, "... rightfully societies have invested in Aamby Valley Ltd".

"We have always submitted our audited financial statements which are in the public domain. The Central Registrar, in 2018 has also conducted a special audit and found no violation of bye-laws/Act. Also please note that as per the law, probing cooperative society is out of the preview of any outside agency.

"Hence we refute the allegations and have contested the allegations at the appropriate forum. Any query by the registrar will be addressed with the regulator," the spokesperson said.

Official sources said the SFIO is looking into affairs of some Sahara entities and it will take into account additional references that have been forwarded by the Corporate Affairs Ministry to the probe agency. However, any specific detail could not be ascertained.

The Registrar, in its letter, alleged that the four societies also made "significant investments" in various Sahara group companies, while "fictitious profits" were shown in the accounts of the societies for sale and purchase of shares of Ambey Valley Limited amongst the group companies.

It further said that an amount of Rs 2,253 crore was taken out from the funds of one of the four societies and deposited with the Securities and Exchange Board of India on account of the group's long-running dispute with the capital market regulator and was shown as an advance to Subrata Roy.

The Registrar said the government needs to order an SFIO investigation to ascertain the valuation of assets and shares of the companies in which funds from the cooperatives have been invested, so as to safeguard the "hard-earned money and deposits made by crores of Indian citizens" in the four cooperative societies.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel