Subrata Roy, unused cash with SEBI, and fantasies of a comeback that never happened

Subrata Roy died on November 14 at the age of 75

Subrata Roy, India’s self-styled baron for the poor, who hobnobbed with the high and mighty, and wore trademark half-jackets and diamond cufflinks, has crossed the rainbow bridge carrying a huge grudge: Why hadn’t the Securities and Exchange Board of India (SEBI) refunded his cash if it was unable to find unpaid investors?

The amount was a whopping Rs 21,000 crore plus, enough to create 14 medical colleges. SEBI used only a small portion to pay investors who claimed they were unpaid after investing their savings in chit funds operated by the Lucknow-based conglomerate.

“We are devastated, Sir (Subrata Roy) often talked about the missing cash. This is nothing but injustice. This is rank injustice. How come SEBI could not find investors who said they were duped? Or was it deliberately done to crush him,” Roy’s trusted lieutenant and relative Abhijit Sarkar told MoneyControl last night.

“But his plans will take shape and the Sahara group will rise again,” added Sarkar. Political cognoscenti in the Indian Capital said it would be a long haul, because it remains to be seen how much cash there is in the Sahara kitty.

Out of reach

Sahara insiders claimed Roy had tried reaching out to SEBI head Madhavi Puri Buch and also the country’s finance minister, Nirmala Sitharaman, to resolve the case and get the unused cash refunded. However, there was a deathly silence from India’s market regulator.

Indeed, the market regulator has argued in the Supreme Court that Sahara has to pay more, approximately a little over Rs 24,000 crore. The Supreme Court has ordered the auctioning of the Rs 39.000 crore Aamby Valley City, a 10,600-acre township developed on the outskirts of Mumbai.

Roy tried hard, but perhaps realised the cash would never come back.

“He just could not handle it. His health complications started on Diwali night; he said he was not feeling well and wanted to be shifted to hospital,” said Sarkar. Roy had an extended battle with complications arising from hypertension, diabetes and metastatic malignancy.

For quite some time, he was stationed in Mumbai, at the Sahara Star hotel next to the airport. The hotel was very special to Roy, and he often hosted some of his corporate and Bollywood friends there. It was at Sahara Star that he had asked his men to create the best bar in Mumbai. And once it happened, it was opened to the city’s glitterati. Those present called it a red carpet walk.

Doing time

The dustup with SEBI and subsequent jailing in Tihar jail—Asia’s largest prison—for nearly two years almost shattered him. He tried his best to sell his assets from the jail and had a corporate setup inside the prison with top-end machines for video conferencing. Roy pushed his advocate Harish Salve to seek permission from the Supreme Court not to allow jail authorities to identify his visitors but only frisk them. It was a big call and even the jail authorities were stunned.

“Every inmate of the jail meets me. But Subrata Roy, I had to visit in his cell,” a former jailor told this reporter. “Probably he wanted to send me a message that he was powerful and wrongly confined. I didn’t mind, I met him. He was very courteous and spoke on a host of issues. I realised he was a man who knew many things.”

Amar Singh of the Samajwadi Party had once claimed that he would write a three-par autobiography of Roy but that did not happen. Roy himself wrote a book on life’s lessons.

Roy called his prison term a national betrayal. He told prison staff that he was amazed to see not a single candle lit by his friends to protest his arrest, especially in Delhi, where everyone protests with candles at the India Gate.

But when he was in power, he was like the Julius Caesar of Uttar Pradesh and India. He was surrounded by top industrialists, film stars, sportspersons and corporate captains. Two hostesses would constantly wipe sweat from his face and apply makeup.

During a flight on his private jet from Mumbai to Raipur, Roy told this reporter that he was scripting a comeback, and would venture into education. As he spoke, one of his relatives, a Bollywood singer, recited the Hanuman Chalisa, a devotional hymn in praise of Hanuman to ward off ill-effects. Roy told me his target audience would be the poor, as was the case with his earlier controversial ventures.

Shift in business focus

He agreed that the contentious court cases with SEBI had considerably slowed down the growth of his Lucknow-based conglomerate. Roy even said that he needed to shift the focus of his business and had put together a team drawn from some of the top universities and colleges across India and even abroad. The team, he said, had designed an online education business totaling 14,000 hours of edited software for school and college students, and would be offered at a minimal cost to millions of subscribers in small towns and villages. He told me he also wanted to set up hospitals in villages and low-cost housing for the poor. But nothing has been heard about his plans.

KPMG and Google jointly estimate India’s education market to be worth a little over $25 billion, with 22 percent annual growth. The online market is currently pegged at $2.5 billion.

In October 2017, Roy flew in his private jet to as many as 18 cities and met his employees, who also offered him the traditional Sahara salutes by crossing their hearts with their right arms. Many waved festoons and fired confetti cannons. Roy told his loyalists not to lose hope.

He told them he had a way of helping people, as he did with megastar Amitabh Bachchan, who was once cash-strapped after his ventures failed abysmally. It was then rumoured that one of the conditions of the help was that Bachchan would receive Roy at the airport every time he visited Mumbai.

Once, an advertising campaign for Sahara India shot by Pradip Sarkar of Parineeta fame had a wide canvas with booming drums, men and women dressed in black and white, like lawyers, running across expansive flyovers. It ended with Roy appearing in the frame.

If the Sahara group has to retain the confidence of its investors, it needs to send out another message. Else, the Sahara story will cease to exist like its flashy promoter, who had once coined a phrase that indicated the whole of India belonged to him: Bharat hain hamara, hum hain Sahara.