Subrata Roy’s Rise And Fall: From Controlling A Mega Business Empire To Imprisonment; All You Need To Know
Subrata Roy was fighting several regulatory and legal battles, as he was accused of circumventing regulations with Ponzi schemes to create multi-level marketing schemes
Chief of Sahara Group, Subrata Roy, passed away on Tuesday late evening in Mumbai. Roy, who was suffering from a prolonged illness, died of a cardiorespiratory arrest. He was 75. Roy was admitted to Kokilaben Dhirubhai Ambani Hospital & Medical Research Institute in Mumbai on Sunday after his health deteriorated.
Subrata Roy, who was at the centre of many controversies, had created a huge business empire across retail, real estate, and financial services sectors. Of late, he was fighting several regulatory and legal battles, as he was accused of circumventing regulations with Ponzi schemes to create multi-level marketing schemes. However, his company always denied those allegations.
The Rise And Fall Of Subrata Roy
On June 10, 1948, Subrata Roy was born in Araria, Bihar. Upon the death of his father, Sudhir Chandra Roy, Subrata Roy was compelled to take up odd jobs as he was the eldest son of his family. After completing his diploma, Roy’s journey started with a Lambretta scooter, where he would sell salted snacks under the venture called Jaya Products, however, the venture later failed.
Later, he founded the Sahara India Pariwar, which operated businesses such as Aamby Valley City, Sahara Movie Studios, Air Sahara, and others. In 1978, he set up the Sahara Group in Gorakhpur. This venture allowed small investors to invest money and receive assured income in return. It was operated by Sahara India Financial, the group's flagship firm. Roy employed many people as its agents who would sell these schemes who did not have access to the formal banking system.
In its heyday, Sahara Group used to own several media firms. The group owned Sahara One Media and Entertainment, operated three Hindi-language channels, a movie channel, a general entertainment channel, and a channel for Hindu-dubbed movies.
In 2013, Roy reported having assets totaling about Rs 50 million ($915,200).
Sahara Group also started a commercial airline, Air Sahara. The airline was later sold to Jet Airways in 2006 for over $500 million. The group also had acquisitions in the luxury hospitality segment, including New York's Plaza Hotel and London's Grosvenor House Hotel.
The group had also stepped into the sports arena. It sponsored the Indian cricket team until 2013 and bought the Pune franchise of the IPL for $370 million in 2010. However, they pulled out of the franchise in 2018. Apart from cricket, Sahara Group was also the main sponsor of the Indian hockey team, and bought a stake in Vijay Mallya's Formula One racing team.
Sahara Went Downhill
However, gradually things have gone from bad to worse. Upon enquiry, markets regulator SEBI barred Sahara Prime City from raising money from the public. In 2008, the Reserve Bank of India (RBI) had also asked the firm to stop accepting more public deposits. The group had deposits of over Rs 20,000 crore at that point in time.
The SEBI in 2011 ordered two Sahara Group firms, Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL), to refund the money raised from about 3 crore investors through certain bonds known as Optionally Fully Convertible Bonds (OFCDs). The Supreme Court in 2012 upheld SEBI’s directions and asked the companies to refund the money collected from investors with 15 per cent interest.
After that Roy was sent to jail and he was in prison until 2016. He was released on parole, but was again sent back to jail. Most of the properties of Sahara Group were attached by the Income Tax Department.
The central government in 2023 launched a Sahara Refund Portal where depositors could claim their refund in 45 days. Depositors of Sahara Credit Cooperative Society Limited, Saharayan Universal Multipurpose Society Limited, and Hamara India Credit Cooperative Society Limited before March 22, 2022 are eligible for the refund. However, after Roy’s demise on Tuesday, the undistributed funds totalling over Rs 25,000 crore, which was lying with the SEBI’s account, have again come back into focus.
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