Subrata Roy, the chairman of Sahara Group, died on Tuesday after a long battle with the Securities and Exchange Board of India (Sebi), and his death has brought the issue of refunds to nearly 30 million individual investors back into focus, with more than Rs 25,000 crore at stake.

This is significant since the late founder of the Sahara Group constantly claimed that the capital markets regulator had not done enough to reimburse the company's investors, despite the fact that the company had deposited roughly Rs 24,000 crore with the regulatory body. 

According to the regulator's own declarations, it had made refunds of roughly Rs 138 crore as of March 31, despite the fact that the sum set aside for refunds to investors was a massive Rs 25,163 crore (with accrued interest) as of March 31. 

The issue dates back to 2011, when Sebi ordered two Sahara group entities, Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL), to refund funds raised from nearly 30 million individual investors via Optionally Fully Convertible Bonds (OFCDs). 

The Sebi order was the result of a lengthy investigation that established that the two Sahara group firms breached different regulations while seeking funds from a large number of investors. 

The case was eventually heard by the Supreme Court, which declared in August 2012 that Sebi was correct in requiring the corporations to return the investors and directed the two Sahara entities to deposit the funds with the regulatory agency in charge of the refund process. 

Following that, Sebi established a Special Enforcement Cell to carry out the Supreme Court's orders and invited investors to file claims for their investments in SIREL and SHICL bonds. 

Surprisingly, Sebi stated that until March 31, 2023, it received less than 20,000 applications and refunded little more than 17,500 applications. More crucially, it said that all outstanding applications had been closed. 

"As of March 31, 2023, SEBI had received 19,650 applications with a total of 53,687 accounts." Refunds have been given on 17,526 petitions involving 48,326 accounts for a total of Rs 138.07 crore, including interest of Rs 67.98 crore. The remaining applications were closed "either because their records were not traceable in the documents/data provided by SIRECL and SHCIL or because there was no response from bondholders to the queries raised by SEBI," according to the Sebi annual report for the fiscal year 2022-23. 

The capital market regulator has also claimed that there has been no change in the status of refunds from the fiscal year 2021-22, as it is expecting additional instructions from the Supreme Court, and that it has filed as many as 23 status reports as of March 31.