As reported on September 3, 2020, the government of India has red-flagged four cooperative societies of the Sahara Group and their deposits of over Rs 86,673 crore that belonged to over four crore depositors. Most of the money went as investment into the Aamby Valley project in Lonavala Maharashtra.
The group started three of these societies between 2012 and 2014, when two of its firms were under the Supreme Court radar for not paying Rs 20,000 crore to depositors of schemes which were declared illegal and for which promoter Subrata Roy was arrested. The government now wants an investigation against the societies after high irregularities were found, putting depositors’ money at serious risk.
In this connection Central Registrar of Cooperative Societies, on August 9, 2020, demanded an investigation by the Serious Fraud Investigation Office (SFIO) against the Sahara Group. The Registrar revealed that fictitious profits in transaction of shares of Aamby Valley. These entities show income from sale of shares whereas such transfers happened within the group entities only.
The Sahara Credit Cooperative Society Ltd was formed in 2010, while Humara India Credit Cooperative Society Ltd, Saharayn Universal Multipurpose Society Ltd, and Stars Multipurpose Cooperative Society Ltd were formed in 2014. All of them were set up as per the Multi State Cooperative Societies Act under the Ministry of Agriculture.
The hard-earned money and deposits made by crores of Indian citizens in these four cooperative societies are under serious threat of erosion. All such deposits are now at the mercy of Sahara Group companies especially Aamby Valley.
According to the bye-laws of cooperatives, a society can invest its funds in cooperative banks; government securities; scheduled banks; other cooperatives; subsidiaries; listed companies; and mutual funds, exchange traded funds, and index funds regulated by SEBI. The Sahara Group has violated all these norms. While the group defends itself on the grounds of its own bye-laws, in January 2019, the Registrar ruled out that contributions from members of a society which is retained for a fixed term, as is the case of the Sahara societies, amounts to a deposit. And such deposits received by cooperative societies will come under the purview of The Banning of Unregulated Deposit Schemes Act, 2019, introduced to curb ponzi schemes in the country.