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Corporate Nov 25, 2012

Submission deadline for verification in Sahara case extended

New Delhi: Market watchdog Sebi has extended the deadline by one month for submission of bids by public sector banks and KYC Registration Agencies (KRAs) to conduct "in-person verification" of about three crore investors in the high-profile Sahara case to ascertain their genuineness.

The Securities and Exchange Board of India (Sebi) had floated a tender in this regard on 2 November and had earlier asked the public sector banks and KRAs to submit their applications by 22 November.

Sahara chief Subrata Roy. AFP

However, Sebi has now decided to extend the deadline for bid submission to December 21 and would open the technical bids on the same day.

Earlier, the technical bids were scheduled to be opened on 22 November, while a pre-bid meeting was held by Sebi with the interested parties on 7 November.

The selected 'In-Person Verification (IPV) Agency' would be mandated to interact "face-to-face" with all investors in the Sahara case to ascertain their genuineness. Sebi has been mandated by the Supreme Court to facilitate refund of about Rs 24,000 crore with 15 percent interest to the bondholders of two Sahara group firms after ascertaining their genuineness.

In its order dated 31 August, the Supreme Court had asked Sebi to ascertain the genuineness of an estimated three crore bondholders of OFCDs (Optionally Fully Convertible Debentures) of two Sahara group companies (Sahara Housing Investment Corporation Ltd and Sahara Real Estate Corporation Ltd) and thereafter facilitate refund of the money with the interest.

In this regard, Sebi has decided to carry out in-person verification of these bondholders, for which it is seeking the services of public sector banks and KRAs.

The KRAs are authorised agencies to carry out KYC (Know Your Client) requirements for all the market entities, including brokerage firms and mutual funds.

The selected agency would have to meet the bondholders face to face to establish their existence, visit their given address to ascertain their residence proof and verify their original identity and address proofs vis-a-vis given details.

The IPV Agency would also have to get the copies of identity/address proofs signed by the bondholders and verify the documents related to investment in OFCDs vis-a-vis details provided by Sebi and its agencies.

Sebi is also in the process of appointing investigating agencies to assist it in this matter, while it is also hiring a Registrar and Transfer Agent (RTA) for investor data and payment processing related works in the case.

The RTA's job would involve scanning and verification of investor documents, setting up and managing of toll-free investor helpline and grievance redressal cell and processing of payments to the genuine investors.

PTI

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