Sahara Group's Chief Subrata Roy after a prolonged illness, took his last breath on Tuesday night in Mumbai. The 75-year-old business man died of a cardiorespiratory arrest.
"It is with profound sadness that Sahara India Pariwar informs the demise of our Hon'ble 'Saharasri' Subrata Roy Sahara, Managing Worker and Chairman, Sahara India Pariwar," the group statement read. The statement went on to call him an inspirational leader and a visionary.
During his life journey from rags to riches, Roy was faced with multiple regulatory and legal battles. Once a successful conglomerate minting profits, the Sahara group was reduced to ashes, once the scams became too hard to hide. The death of Subrata Roy has also brought the undistributed funds totalling over Rs 25,000 crore lying with the capital markets regulator Sebi's account under focus.
This is the Saharasri's story of rags to riches and his inevitable downfall.
Subrata Roy's Early life
Subrata Roy was born in Bihar's Araria on June 10, 1948 to a Bengali family. As the eldest son of his family, Roy completed his diploma. Immediately after graduating, he was forced to take up a job due to the sudden demise of his father Sudhir Chandra.
His entreprenurial journey started with a Lambretta scooter, where he would sell salted snacks under the venture called "Jaya Products". The venture, however, failed. He also took up another venture with his wife, Swapna Roy, but it, too, met the same fate.
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Finally in 1978, he established the Sahara Group in Gorakhpur. The group allowed small investors like rickshaw pullers and tea stall owners to invest money and receive assured income in return. This was operated by the group's flagship firm Sahara India Financial. The company employed millions as agents who would sell these schemes to Indians who did not have access to the formal banking system in the country.
Over the next three decades, the group diversified into different sectors, including real estate, media, and aviation, until it all fell apart in the late 2000s.
Sahara India Group
Sahara group grew tremendously, touching base in almost all the sectors. It even owned an extensive media network. Sahara One Media and Entertainment operated three Hindi-language channels. Its production house Sahara Movie Studios co-produced several big hits including Wanted, Sarkar, and Page 3. The group also owned newspapers and magazines in Hindi, English and Urdu.
Apart from this the group also owned Air Sahara - a full-scaled commercial airline that was sold to Jet Airways in 2006 for $500 million. In the hospitality segment the group acquired New York's Plaza Hotel and London's Grosvenor House Hotel.
The company grew fast and even sponsored the Indian cricket team until 2013. In what was the highest bid in the history if Indian Premier League, it bought the Pune franchise for $370 million in 2010 before pulling out of it in 2018. Apart from Cricket the group had also sponsored the Indian hockey team and owned a stake in Vijay Mallya's Formula One Racing team.
Subrata Roy's Life of Luxury
The vast riches Subrata Roy earned were evident in the flamboyant life he led. Often seen in his iconic waistcoat and tie, Roy had movie stars, politicians and businessmen as friends. His 270-acre gated residence, "Sahar Seher" in Lucknow, hosted many events and was graced by politicians, corporate personalities, and other celebrities
The wedding of his two sons Sushanto and Seemanto was the talk of the town in 2004. The double wedding that was considered to be one of the most expensive weddings in India had a Rs 550 crore budget. Subrata Roy invited over 11,000 guests for the wedding, which was held in Lucknow. The Sahara Group chief even hired private jets to fly in guests from around the world for the wedding which was spread over four days.
Sahara Deposit Scam
However, the tremendous success of Subrata Roy did not last long. He faced multiple regulatory and legal battles in connection with his group firms that were accused of circumventing regulations with Ponzi schemes, allegations his group always denied.
In 2011, a financial scandal involving the Sahara Group Surfaced when discrepancies in housing bonds issued by Sahara India Real Estate Corporation and Sahara Housing Investment Corporation were brought to light by Chartered accountant Roshan Lal. These companies had raised substantial funds without proper accountability.
The National Housing Bank then referred the complaint to SEBI for investigation. However, Roy contested SEBI's jurisdiction asserting that the company had submitted its prospectus to the Registrar of Companies before issuing the bonds. But the investigation went on and SEBI instructed the Sahara Companies to cease the disputed bond sale and reimburse the investors. Roy was given three-month deadline along with a 15% interest rate to deposit the funds with SEBI.
After making the first installment of Rs 5,120 crore, Subrata Roy refused to make the remaining two installments. He claimed that the investors had already been compensated. In 2014, Roy was arrested for failing to settle the outstanding amount of Rs 10,000 crore. The Court mentioned that he will be released upon bringing Rs 5,000 crore in cash and Rs 5,000 crore in bank guarantee. He was given parole in 2016 after being behind the bar for 2 years. The Supreme Court, concerned about his property status had asked him to return to Jail.
The Income Tax department also seized many of the properties on the auction list. In November 2020, SEBI urged the Supreme Court to revoke Roy's parole if he failed to settle the outstanding amount of Rs 62,600 crore.
Meanwhile, in August this year, the centre started the process to refund ₹ 5,000 crore to 10 crore depositors whose funds are struck in four cooperative societies of Sahara Group. Union Minister Amit Shah launched the 'CRCS-Sahara Refund Portal' in July to facilitate the return of the money to investors. Around 18 lakh depositors have been registered on the portal. In March, the government announced that the money would be returned to 10 crore investors of the four cooperative societies within 9 months.
Acts of Philanthropy
He was developing 10,600 acres of Aamby Valley luxury township in Maharashtra. It is alleged that the money raised by Sahara Prime City from public and other investors was used in the construction. It also had Sahara City and Sahatra Grace townships across several cities in the country.
Despite these controversies, he had also contributed largely to the society. His NGO, Sahara Welfare Foundation, had adopted the Bhimsar Chakasar village in Gujarat after the earth quake and constructed 839 houses. He has also shown unwavering support for the families of Kargil war martyrs by providing economic, emotional and educational support. The NGO has also given various scholarships to students and health care benefits to marginalised communities, according to Sahara India Pariwar's website.
