The recent demise of Subrata Roy, the founder and chairperson of Sahara India Pariwar at the age of 75, marks the end of an influential era in the Indian business landscape. The Sahara scam stands out as one of the most significant financial frauds in India’s history, encompassing massive monetary transactions, regulatory violations, and a compelling legal saga. Roy, recognized for building a vast empire spanning finance, media, entertainment, and real estate, leaves behind a legacy tarnished by the infamous Sahara Scam.
Who was Subrata Roy:
Subrata Roy, born in Bihar’s Araria in 1948, commenced his business journey in 1976 with Sahara Finance, a chit fund company. In 1978, he revamped the company’s financial model, drawing inspiration from the older Peerless Group. Under his leadership, the Sahara group became a prominent player in the business world, undertaking ambitious projects like Aamby Valley City and acquiring iconic properties such as the Grosvenor House Hotel in London and the Plaza Hotel in New York City. The group also made significant strides in the media industry with ventures like Sahara TV (later renamed Sahara One) and the Hindi-language newspaper Rashtriya Sahara.
What is Sahara Scam:
Roy’s illustrious career was overshadowed by the Sahara Scam, a financial scandal that implicated him in allegations of fund mismanagement totaling Rs 24,000 crore. In 2011, SEBI accused Sahara of raising funds through Optionally Fully Convertible Debentures (OFCDs) without proper approvals, leading to a directive for the group to refund the money to investors. Between 2008 and 2011, Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) raised approximately Rs. 24,000 crore from over 30 million investors through OFCDs, promising high returns.
The Supreme Court, in August 2012, upheld SEBI’s directive, instructing the Sahara Group to repay investors with interest in three installments. This decision had significant repercussions for both the Sahara Group and its investors. Despite the group’s claims of substantial repayments and minimal outstanding amounts, SEBI contested, leading to Roy’s arrest in 2014. He spent time in Tihar Jail before being released on parole in 2017, leaving the Sahara group’s reputation tarnished by the scandal.
Despite the controversies, Roy’s career had both highs and lows. Known for providing financial services, he also engaged in humanitarian efforts, contributing to disaster relief during the Uttarakhand floods and supporting the families of Kargil War martyrs. However, the legacy of the Sahara Scam remains a significant part of his narrative, highlighting the complexities of ambition, power, and the consequences of corporate governance in India’s business landscape. As the business world reflects on Subrata Roy’s life, it underscores the need for ethical practices and transparency, even in the pursuit of business success.