Subrata Roy, founder and chief of the Sahara Group, died at the age of 75 in Mumbai on Tuesday after a prolonged illness. Roy, who created a huge business empire across retail, real estate and financial services sectors, was at the centre of huge controversy and faced several legal battles for violating regulations with his Ponzi schemes.
In his prime, Roy made the Sahara Group a multi-billion dollar enterprise and a household name, while his firm was among the biggest employers in the country employing around 12 lakh people. He also made friends among the famous and powerful across the fields of politics and Bollywood.
He went on to script one of the most famous rags-to-riches stories of the country while his enterprise went on to own landmark global properties, including New York’s Plaza Hotel and London’s iconic Grosvenor House. Sahara also sponsored the Indian cricket and hockey teams and owned a Formula One racing team.
How the Trouble Began?
Subrata Roy’s troubles began in November 2010 when stock market regulator Securities and Exchange Board of India (SEBI) asked two entities of Sahara Group not to mobilise funds from equity markets or from issuance of any security to the public.
It accused Sahara of raising funds through Optionally Fully Convertible Debentures (OFCDs) without proper approvals. Between 2008 and 2011, Sahara India Real Estate Corporation Limited and Sahara Housing Investment Corporation Limited collected around Rs 24,000 crore from over 3 crore investors through OFCDs. This led to a directive from SEBI in 2011 for two Sahara companies to refund the money raised from investors, which the group challenged the order in the Securities Appellate Tribunal (SAT) and later in the Supreme Court.
In August 2012, the Supreme Court ordered the Sahara Group to return Rs 24,000 crore, plus 15% interest, to millions of investors, within three months. Roy failed to deposit the money with SEBI with a three-month deadline and the interest despite court orders in 2012 and 2015. He paid the first instalment of Rs 5,120 Crores but not the subsequent two payments, claiming that investors had already been reimbursed.
According to SEBI, Sahara had paid only a part of the principal amount, and the interest had mounted to over Rs 62,600 crore.
Subrata Roy’s Arrest
In 2014, the Supreme Court ordered the arrest of Subrata Roy in a contempt case arising out of non-refund of more than Rs 20,000 crore to investors by two of his companies. He was sent to Tihar Jail but he was later released on parole in 2017. Sahara Group was also accused of money laundering by the Enforcement Directorate in November 2017.
In another incident in 2014, a Gwalior man threw ink on Roy’s face and called him a thief when he was brought to the Supreme Court in his trademark waistcoat and tie.
When Sahara Sent 128 Trucks with Documents
When Sahara was asked by the Supreme Court to return Rs 24,000 crore and asked to give SEBI the entire sets of investor documents for verification, Sahara had sent 128 trucks containing over 31,000 cartons full of documents.
SEBI had to hire special storage facility for the safekeeping of the documents, which were digitised later. Later in 2016, the loads of documents were returned back to Sahara.
Bad Boy Billionaires
Roy was also embroiled in a controversy around a Netflix show called Bad Boy Billionaires. The show explored “the greed, fraud and corruption” that built up and ultimately brought down some of most infamous business tycoons, including Roy, Vijay Mallya and Mehul Choksi.
A court in Bihar restrained the streaming platform from using Roy’s name in the series. However, in September, the Supreme Court dismissed Netflix’s petition against the order.
