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Sahara Group’s Subrata Roy, 75, passes away: Journey from rags to riches marred by Sahara Scam controversy

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Shillong, Nov 15: Subrata Roy, the founder and chairperson of Sahara India Pariwar died at the age of 75 in Mumbai after battling a prolonged illness. His demise signifies the conclusion of an influential era in the Indian business realm, as he was recognised for establishing a vast empire that extended across finance, media, entertainment, and real estate sectors.

As the Sahara group grieves the departure of its leader, the business world reflects on the legacy of an individual who commenced with just Rs 2,000 and crafted an empire that, at its peak, stood as the second-largest employer in India, trailing only the government.

Who was Subrata Roy?

Roy was born in Bihar’s Araria in 1948. He started his journey as businessman in 1976 with Sahara Finance, a chit fund company.
In 1978, he took over and revamped the company’s financial model taking inspiration from the older Peerless Group.

Under the leadership of Roy, the Sahara group gained prominence through ambitious projects like Aamby Valley City and notable acquisitions such as the iconic Grosvenor House Hotel in London and the Plaza Hotel in New York City. Additionally, the group made significant advancements in the media industry through ventures like Sahara TV, later renamed Sahara One, and the Hindi-language newspaper Rashtriya Sahara.

But his career was not only about building the business empire, but his distinguished career was marred by controversy. The infamous Sahara Scam implicated Roy in allegations of fund mismanagement, totalling Rs 24,000 crore.

Sahara Group's Subrata Roy, 75, passes away: Journey from rags to riches marred by Sahara Scam controversy

Sahara Scam 2011:

In 2011, the Securities and Exchange Board of India (SEBI) accused Sahara of raising funds through Optionally Fully Convertible Debentures (OFCDs) without proper approvals which resulted to directive from SEBI for two Sahara companies to refund the money raised from investors.

Between 2008 and 2011, Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) raised around Rs. 24,000 crore (approximately US$ 3.2 billion) from over 30 million investors through Optionally Fully Convertible Debentures (OFCDs). The companies lured investors with the promise of high returns, attracting a significant number of individuals from all across India.

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In August 2012, the Supreme Court affirmed SEBI’s directive, instructing the Sahara Group to reimburse the investors along with interest in three installments. This decision dealt a substantial blow to both the Sahara Group and its investors. Despite the Sahara Group asserting that a considerable sum had already been repaid to investors and that the outstanding amount was minimal, SEBI contested these claims, contending that the group had not fully adhered to its order.

In 2014, Roy was arrested in March and had to spent time in Tihar Jail before he was released on parole in 2017. The scam tarnished the reputation of the Sahara group and Roy.

Despite all the controversies, he was known for providing financial services and also for providing humanitarian efforts including his contributions to disaster relief during the Uttarakhand floods and support to the families of Kargil War martyrs.

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