Riches To Rags: Once upon a time, Subrata Roy hosted opulent events and mixed with a large group of cricketers and Bollywood celebrities. The corporate tycoon was frequently seen with foreign leaders, Indian politicians, and other powerful people. However, he has spent years sulking in the Tihar Jail in New Delhi, which represents a precipitous fall from grace for the founder and chairman of the multibillion-dollar conglomerate Sahara India Pariwar. Sahara is a company with interests in a variety of industries, from media to real estate, and its headquarters are in Lucknow, India. It is the proprietor of the New York Plaza Hotel as well as the London Grosvenor House Hotel. In addition to sponsoring the Indian cricket team for ten years, Sahara has an interest in a Formula One racing team.

Quickly Rose To New Heights

You have probably heard Subrata Roy’s tale of seemingly rags to riches many times. Roy began with a meager sum of Rs. 2,000 in 1978 and quickly rose to new heights. A larger-than-life figure, Subrata Roy, was in charge of Sahara. Even ‘India Today’ listed him among the top ten influential Indians. As the second-largest employer in India, Roy played a key role in the development of one of the most powerful economic empires. When the allegations of Sahara fund mismanagement, worth Rs. 24,000 crore, were revealed, all of his fame was lost. A jury sent Subrata Roy to judicial custody in Tihar Jail. In 2017, he was released on parole.

RBI & SEBI- Two Big Blows

The group encountered a regulatory barrier for the first time in 2008. The same year, Sahara Financial Corporation received a directive from the Reserve Bank of India (RBI) to stop accepting new deposits. It was a significant setback since it might have severely hampered the cash flow of other group companies that were having trouble turning a profit. The firm needed a consistent flow of new money to maintain its numerous companies. The market regulator, SEBI, then delivered yet another blow. Sahara was asked to stop offering bonds to investors by two of its real estate-related businesses.The two businesses have raised more than Rs 20,000 crore from close to three crore people throughout the nation. The program promised investors a hefty return after ten years. SEBI ruled that prior clearance from the market regulator was required for any company seeking financing through bonds from more than 50 individuals. Sahara was breaking rules since it lacked this approval, which was against the law.

Reputations Hit After Arrest

However, Sahara representatives would counter that the ministry of corporate affairs had given them permission to raise capital. In August 2012, the case was brought before the Supreme Court, which rendered a decision in favor of SEBI. Within 90 days, the Sahara group was required to deposit Rs 24,000 crore with SEBI. The regulator was in charge of paying the genuine investors their money back. Roy and two of his coworkers were taken into custody because they didn’t fully comply with the highest court’s judgment in a timely manner. The group’s and its managing employee’s reputations took a serious hit after the arrest.

Lack Of Transparency

By providing financial services to those who were previously outside of the banking system, the Sahara Group believes that the organization has helped to increase financial inclusion. Market observers, though, contend that the organization has never been transparent. And several instances of its failure to adhere to rules in letter and spirit have been discovered. They note that the organization repeatedly switched the financial instruments it used to raise money, moving from basic deposits to bonds and then to cooperative societies in an effort to avoid regulatory supervision. Additionally, the group has been accused of other things. Redeeming a product from the group is reportedly difficult once it has been invested. To ensure that there is no capital outflow, investors are encouraged to continually reinvest in new schemes. And critics have emphasized the organization’s lack of transparency about the source and usage of funds. The Sahara brand has possibly suffered the most from a lack of transparency.

Sahara Chief boasts of having everything one needs for a comfortable life, including a helipad, a cricket stadium, a small sports complex, a lake that is 11 km in circumference, an 18-hole mini-golf course, a rotating open-air stage, a state-of-the-art auditorium with seating for 3,500, a 124-seat movie theater, a five-bed health center with an ambulance, a fire station, and a petrol pump. As a combination of a cunning businessman, flashy showman, and cult leader, Subrata Roy—who goes by the name Saharasri, which means “Mr. Sahara”—is probably one of the most bizarre figures in India’s corporate history.