Is the sprawling Sahara empire guilty of running chit funds as a front for black money? Or, as Sahara claims, is it helping millions of those who have no access to formal banking, and is being victimised by India's regulators and enforcement agencies?
Sahara is perhaps one of India's most flamboyant business empires. But the fuel to run it comes from selling "get-rich-quick" investment schemes to millions of investors in the Hindi heartland.
It is one such scheme - two Sahara companies, Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation Limited (SHICL) - sold bonds to 4 crore investors to raise Rs 25,000 crore, which came under the scanner of SEBI in 2010.
Sahara said this was a private placement of bonds to their own workers, employees and their families. But SEBI said it was a public issue, which should be regulated. The Supreme Court ruled against Sahara, ordering that the money be handed to SEBI by February, so SEBI, in turn, can refund the investors.
From the time of the order, Sahara's responses have been characterised by reversals and contradictions, which have led SEBI and now other enforcement agencies to suspect that they may be investigating more than just an "illegal" investor scheme.
Not long after the Supreme Court judgment, Sahara made a startling claim: that they have repaid almost all the money, to the tune of about Rs 20,000 crore, to the investors in just a matter of a few months.
This elicited a sarcastic remark from SEBI chief UK Sinha, who said, "There is a famous case, I need not name it, where a particular company has claimed that it has refunded more than Rs 20,000 crore to so-called investors out of which more than 90% has been returned in cash. I would like all of you to ponder and think how feasible and how credible this story can be. That more than Rs 20,000 crore have been refunded over a period of may be three-four months, not over a period of five years or so and that, money has been returned through cash."
Sahara says the proof of the refunds is in the Rs five crore documents sent in 127 trucks to SEBI.
SEBI says it is a claim which is almost impossible to verify. They have stored the Sahara documents in a Navi Mumbai warehouse, where they are being studied by a team of 45-50 people, with 80 scanning machines. But they say the material has been sent in an incomprehensible way: with the names of the depositors and their refund vouchers in different boxes, as if to deliberately make the task of verification even more difficult.
Counsel for SEBI, Arvind Datar, told NDTV that the manner in which Sahara has sent the material is unusable, a contention rejected by S Ganesh, Sahara's lawyer, who said the documents were in proper order.
In a bid to verify Sahara's claims, SEBI wrote to 20,000 sample depositors, asking them to apply for a refund, out of which only 68 wrote back - less than 1%.
Sahara's lawyers say that SEBI has yet to give them details of these 20,000.
But a sample of the names and addresses of Sahara investors submitted to SEBI do not appear genuine, further confirmed by our reporters from different states who went to locate people at the given addresses.
Here are three examples of depositors that Sahara claims have been refunded.
1. Sanjay Rayakwar
48, Shirla Mata
Madhya Pradesh - 456 001
2. Surendra Kumar
3, Indira Colony Padampur
Punjab - 144 624
3. Randhir Singh
277, Ward No.12
Haryana - 132 103
Our reporters went to each of these addresses and found that either the addresses were false or found no such person at the address.
Even if these are exceptions, the possibility of non-existent depositors raised alarm bells that if not all, some of the money might be laundered, thus raising questions as to whether Sahara has any genuine depositors.
Look in any small town in India's cow belt and you will find those like Indu Devi, a small tea-stall owner in Varanasi, who has trusted Sahara with her meagre earnings.
She says she has been depositing small amounts with Sahara and getting her money back.
But it is an arrangement which leaves her highly vulnerable. All the details are written in a register. There is no formal record or description of the scheme.
Such examples might validate Sahara's claims to some extent, that they do have a genuine pool of investors made up of the very poor. But it also highlights how vulnerable they are to Sahara's regulatory battles, of which they have no information.
Like Surendra Sinha from Ranchi, who had subscribed to one of the schemes called Adobe Bonds by SIREC, now banned by SEBI. He says he has not been refunded, but instead made to switch to a new scheme called the Q Shop.
Q Shops are Sahara's entry into retail, advertised no less than by the Indian cricket team as a chain of stores that will sell unadulterated goods. But on its website, it's not just a store but also an investment scheme.
A retired government servant, Mr Sinha has put all his savings in the bond. Now he says he feels cheated by Sahara, who has converted his housing bond into Q Shop. He is also worried if he will ever get the money back, he says.
Even if Sahara does have some genuine investors, who only deposit very small amounts, are they large enough in number to explain the huge sums of money Sahara claims to have raised?
Senior journalist Sharat Pradhan says, "I think bulk of Sahara's deposits come from corrupt politicians, corrupt bureaucrats, black money of film stars, black money of cricketers. The rest of the money, yes, they do have genuine investors. But that is a class of very poor people largely from the areas of eastern Uttar Pradesh, Bihar or Jharkhand. And it is that class which neither has access to banks nor has a voice. So if their money gets swallowed away, they have nowhere to go."
Even Sahara's bank details submitted to SEBI prove that the refunds raise more questions than answers.
Sahara had claimed in its affidavit before the Supreme Court in November 2011 that the initial Rs 25,000 crore was raised by their parent company, Sahara India, which transferred it into the accounts of SIREC and SHICL.
Using that money, Sahara told the court, SIREC and SHICL bought development rights and shares in land assets and real estate projects across the country.
Sahara then said that SIREC and SHICL paid back the money by, in their own words, "internal accruals, own cash flow and by disposing off various investments like equity shares, cancelled various JV agreements and surrendered development rights of various real estate projects".
But SEBI says it found that the books of these companies did not show any refunds to investors. Nor was there any proof that the land assets had been sold, to raise the money, it said.
Now, in a letter filed before the Securities Tribunal on March 19, of which NDTV has an exclusive copy, Sahara has done a U-turn. It now says all the money was raised by Sahara India and paid back by Sahara India.
It is this kind of stonewalling by Sahara which led SEBI to hand over the material to the Enforcement Directorate (ED). But this won't be the first time that the ED has come into the picture. In 2012, it wrote to a number of government agencies, asking for Sahara to be probed for money laundering, but not a single agency responded.
Just five days after SEBI approached the Supreme Court asking for his arrest, Subroto Roy threw a grand party for his granddaughter. On the red carpet walked the UPA's most valuable ally - Mulayam Singh Yadav. Leaders like Digvijaya Singh from the ruling party, former President Pratibha Patil, and even political heavyweights from the Opposition like Arun Jaitley and Sushma Swaraj were present.
Sharat Pradhan says that Sahara's proximity to politicians is well known. He says an Income Tax commissioner who raised questions about Sahara's funds was transferred to a punishment posting.
Given the fear of influence, sources say the probe into money laundering remains uncertain. The immediate focus is to recover the Rs 20,000 crore. But is it a case of too little too late?
For recovering the money, SEBI has two routes - one, to freeze Sahara's bank accounts. But this process hasn't made much headway. The regulator, so far, has written to 58 banks from which they have only recovered a measly Rs. 20 crore.
Option two is to auction Sahara's land assets. But here too, it is not clear if they will recover the money.
Top of the list on SEBI's auction block is 707 acres of unbuilt land in Aamby Valley, the sprawling luxury township built on the outskirts of Mumbai.
Sahara claims the investment is worth Rs 3,459 crore, but an assessment by State Bank of India for SEBI has found the value to be only around Rs 870 crore.
The other major asset is again described in vague terms - a 106-acre Versova project in Village Phadi in the Mumbai suburb of Goregaon for building a resort with five-star amenities.
Our attempts to locate this plot was not easy. Sahara has only mentioned Versova project in Goregaon, which are two separate areas. We then used the survey number given by Sahara, finally traced to a property in Lokhandwala, some distance away from Versova.
But local land authorities told us that the survey number is held by two companies called Beeline Impex and Pearl Cosmetics. Also, it is only a 19 lakh square feet plot, not, as Sahara claims, 46 lakh square feet.
Most of the other land assets are also described in vague terms.
For instance, development rights in land near Delhi and Gurgaon, village Chouma - 186 acres - worth Rs 1,436 crore. Or 90-95% stake in 64 special purpose vehicles in 64 projects in 64 cities - over 4,000 acres land - worth Rs. 1,105 crore.
It is clear that if SEBI wants to auction the land, they will first have to find it.
There is, however, another possibility that a chunk of the Rs 20,000 crore that SEBI is chasing might have left the country, right under the market regulator's nose.
From 2010 onwards, around the time SEBI began its probe, Sahara has been on a mega shopping spree.
Buying an IPL team (Pune Warriors), a stake in a Formula 1 team, a stake in the Plaza Hotel in New York and another New York Hotel, the Dream Downtown, apart from the landmark Grosvenor House Hotel in London.
The total bill - approximately Rs. 9,000 crore.
There are no easy answers to where exactly the money came from. Sahara, too, has refused to divulge details of the source of the funds. Most of the Sahara Group companies, at least the ones for which details are available, make losses, or post very small profits. So it is not possible that the money came internally.
But because of an Enforcement Directorate probe, we do know how the Grosvenor House purchase was funded. A large chunk, more than Rs 2,500 crore came from, or via, SIREC, one of the companies under SEBI's scanner.
The ED probe finds that the money was routed from SIREC to Aamby Valley, and from there to Mauritius and London. The transactions took place from mid-2011, around the time SEBI had begun probing SIREC.
Sahara has said that "at every stage, there has not been a single incident of violation of any regulatory or legal requirement" in the purchase of the hotel.
Today, SEBI has summoned Subroto Roy himself and his key aides to its headquarters with the title deeds of their properties, so they can verify and auction their assets. The Himachal Pradesh High Court passed an order banning all ongoing schemes of Sahara and asked the ED to probe into whether the group is guilty of money laundering. But it's a sign of the group's pervasive influence that none of the government agencies we spoke to are confident that they will recover all the money, far less find out where it came from.