New Delhi, November 15 (Language) Subrata Roy is undoubtedly a well-known name in the industrial sector of the country today, but he reached here after a lot of struggle. He took small steps to reach the top.
Roy started his journey in 1978 by borrowing two thousand rupees and continued it for three decades. A fund worth thousands of crores was created with a minimum contribution of Rs 10-20 from each investor… but it started collapsing after being surrounded by controversies.
Subrata Roy, who was ill for a long time, died in Mumbai on Tuesday. He was 75 years old.
Roy had to battle several regulatory and legal battles regarding his group companies.
Famously, when Roy was asked to provide proof of repayments made to him along with the returns and payments collected from crores of investors, he sent the documents in more than 31,000 cardboard boxes in 128 trucks to the headquarters of capital markets regulator SEBI in Mumbai. Had given.
Securities and Exchange Board of India (SEBI) officials had to put in a lot of effort to sort and verify the huge amount of investor documents. After this, finally SEBI kept these documents in a big warehouse on rent. This warehouse had ‘automatic robotic systems’ and secure ‘vaults’ of 32 lakh cubic feet.
SEBI’s troubles did not end here. The regulator then had to hire a server hosting vendor to provide electronic data storage and web access services for the database of 20 crore scanned pages in the case.
The case arose after a complaint by a group of investors and an individual named Roshan Lal against Sahara Group, which gradually gained momentum. Its impact started becoming visible on Sahara Group and its credibility started weakening.
The group, before being diluted, had interests in financial services, real estate, aviation, premier hotels in London and New York, an IPL cricket team and a Formula One racing team, as well as ‘sponsors’ for the country’s cricket and hockey teams.
One of Sahara’s most ambitious projects was ‘Aamby Valley’, a hill township in Maharashtra which houses ‘villas’ of many celebrities from cricket and films to politics, many of whom were ‘friends’ of Subrata Roy.
It was often alleged that the thousands of crores of rupees that Sahara had collected actually belonged to various politicians, cricketers and Bollywood stars but no evidence of this was ever found.
Aamby Valley was one of several projects undertaken by Sahara Prime City Limited, the real estate arm of the group, and it was the company’s proposed IPO (initial public offering) in 2009 that led to an investigation by regulator SEBI.
When SEBI was looking at the documents filed for the IPO, it received a complaint from the ‘Professional Group for Investor Protection’ on December 25, 2009. It was alleged that Sahara Group company Sahara India Real Estate Corporation Limited (CIRECL) has been issuing convertible bonds to the public across the country for several months and this was not disclosed in the draft documents.
A similar complaint of Roshan Lal was received by SEBI through National Housing Bank in a letter dated January 4, 2010.
The number ‘4’ thereafter became an important date in the SEBI-Sahara saga.
When SEBI issued a notice to Sahara, they approached the Lucknow bench of Allahabad High Court, which stayed it. The matter was listed for hearing on January 4.
Roy was sent to jail on the fourth date (March 4, 2014). In the long-running legal battle, SEBI’s lawyer Arvind Datar appeared for SEBI for the first time on 4th. Sahara’s main affidavit was filed on 4th.
This matter was also placed in the Supreme Court on January 4.
Apart from this, Sahara Group continued to collect funds even while the case was pending in various courts and tribunals. He denied involvement in any wrongdoing and always maintained that all investors got their money back with the promised returns.
Capital markets regulator Securities and Exchange Board of India (SEBI) in 2011 permitted two Sahara group companies, Sahara India Real Estate Corporation Limited (SIREL) and Sahara Housing Investment Corporation Limited (SHICL), to issue bonds in the form of Optionally Fully Convertible Bonds (OFCDs). It was ordered to return the money raised from about three crore investors through some identified bonds.
The regulator had said in the order that both the companies had raised funds in violation of its rules and regulations.
After a long legal battle, the Supreme Court on August 31, 2012 upheld SEBI’s directions and asked both the companies to return the money collected from investors with 15 percent interest.
After this, Sahara was asked to deposit an estimated Rs 24,000 crore with SEBI to return the money to investors. According to SEBI, the total amount deposited in nationalized banks as of March 31, 2023 is around Rs 25,163 crore.
Roy was called “Saharashree” by his employees and friends and used designations such as ‘Managing Functionary’ and ‘Chief Patron’ of the Sahara India Parivar rather than titles such as Managing Director or Chief Executive Officer.
According to the group’s website, it has more than nine crore investors and customers. He owns 30,970 acres of land and assets worth Rs 2,59,900 crore.
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