A sad end to Subrata Roy’s rags-to-riches-to-rags story

Subrata Roy made a promising start as a high flying business magnate only to lose his way.

Someone forgot to tell the young Subrata Roy that the mere fact of being an entrepreneur, no matter how humble the beginnings, doesn't provide lifelong immunity from the law. That one piece of advice, if taken, might have helped him make something more of his life than its rather ignominious ending. Earlier this year the government launched the Central Registrar of Cooperative Societies (CRCS) Sahara refund portal, in an effort to refund the money his companies had collected by subterfuge from over one crore investors. Sadly, that will be his final epitaph.

It needn’t have been so. Having started the Sahara group in 1978 with a small capital base of Rs 20,000, he went on to script a rags-to-riches story riding on multiple businesses ranging from housing to aviation, media to finance. By all accords, he had the knack for it. At its peak the Sahara group ran popular TV channels, built townships like the Aamby Valley, owned such iconic properties as the New York Plaza Hotel, flew a perfectly fine airline which it sold to Jet Airways, and was the official sponsor of the Indian cricket team. Awards and encomiums followed, as did wealth and by 2013 he was within sniffing distance of being a billionaire.

The overflowing coffers spilled on to the social sidewalk with marriages in the family bettering Bollywood movie settings in their glitz and glamor. Wedding invitations to the chosen few went  out accompanied by gifts worth lakhs. By now, Saharasri, as he had ordained he should be addressed by his employees, was a power centre in politics too with his millions lubricating the ambitions of many a politician and a party. His friends however cut across the world of entertainment and business and he was the toast of tinseltown and capitol hill alike.

That should have been enough for most men, coming from where he did. But the problem was that he wanted much more, including seeing himself as a star in music videos. A man utterly without humility, he ran a medieval emperor’s court within his company. Stories abound of hours-long lectures without bathroom breaks and decrees that everyone had to wear shoes of one particular color. Financial wrongdoings were apparently punished with treatment that would be funny if it wasn’t so primitive and fit for an old-fashioned school.

At work, his scams were of the ordinary garden variety. Chit fund schemes proliferated in India at the time. Sahara was no exception. Its modus operandi was simple. Gullible small investors were gently persuaded to place deposits with his companies on the promise of exponential returns. For a while their gullibility wasn’t tested as the returns did appear, boosting confidence. But that bonhomie lasted just for a few months. After that there was nothing. Not surprising since their money was being used to pay off older investors in a familiar game of merry-go-round in which some (as it turned out, many) had to ultimately be left stranded.

When the outrage started, Roy resorted to another popular ruse of the 1990s, an initial public offering (IPO). Unfortunately, that brought him in the crosshairs of the market regulator, Sebi, and from there on his fortune faded as he faced charges of collecting over Rs 24,000 crore from three crore Indians. An aborted bond sale by the group’s housing company provided the final nail in the coffin as he was barred from mobilising any funds from the equity markets or from the public in any form. Thereafter Roy – he denied any wrongdoing – spent the remaining years of his life dealing with the law either from inside or outside a prison cell.

In his death at the age of 75, there will always be the lingering feeling of what might have been had his ambitions stayed within the realm of the permissible.

Sundeep Khanna is a senior journalist and the author of 'Cryptostorm: How India became ground zero of a financial revolution'. Views are personal, and do not represent the stand of this publication.