According to the Supreme Court, the Ministry of Corporate Affairs, which registers all private placements, should have alerted SEBI the moment the OFCDs were submitted.
SEBI's chairman has questions to answer, too.
Last year, his deputy wrote to the prime minister alleging that, under pressure from the Finance Ministry, the chairman was going easy on Sahara by refusing to take out a newspaper advertisement highlighting a High Court judgment against the company.
A public warning from SEBI might have deterred investors. Both SEBI and the Finance Ministry deny the allegations.
The broader question, however, is how to better serve India's rural savers.
Mainstream banks find the lowest end of the market more trouble than it's worth.
But the Sahara saga highlights that there is a large amount of cash in rural India looking for a safe home.
One positive development could be the proposed introduction of a unique identity number for every Indian, which could allow more savers to open a bank account.
If that turns out to be the case, the Sahara mess could at least leave a positive legacy.