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Roy The Bad Boy Billionaire To Pay Rs. 62,600 Crore Immediately

Subrata Roy was arrested in March 2014 after the company failed to comply with a court order to refund money raised from millions of small investors by selling them bonds later ruled to be illegal.

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The Securities and Exchange Board of India (SEBI) has petitioned the Supreme Court to direct Subrata Roy to pay Rs. 62,600 crores (USD 8.43 billion) immediately, or cancel his parole if he doesn’t yield. The markets regulator said the outstanding liability of the Sahara India Pariwar group’s two companies and the group’s chief Roy stand at Rs. 62,600 crore, including interest, according to court filings seen by Bloomberg. Roy’s liabilities have ballooned from Rs. 25,700 crore he was ordered to pay eight years ago. The Supreme Court in 2012 ruled that Sahara group companies violated securities laws and illegally rose over USD 3.5 billion. The companies said monies were raised in cash from millions of Indians who could not avail of banking facilities. SEBI could not trace the investors and when Sahara firms failed to pay up, the court sent Roy to jail.

Sahara India Pariwar’s Subrata Roy, who is on parole, had a closed-door meeting with his employees and investors. Roy and two other directors of Sahara were paroled for four weeks from May 6 and the period was later extended up till now. Roy has been in jail for nearly two years and has been unable to arrange Rs. 10,000 crore for his bail, as ordered by judges. Nowhere in the world does a man say he has Rs. 1.87 lakh crore in properties and still isn’t paying his dues. Earlier the Supreme Court said that SEBI should not sell the properties for less than 90 per cent of the circle rate – the listed market value. If bids are below 90 per cent of the circle rate, the regulator will have to take the permission of the court. Now the Supreme Court has asked the Securities and Exchange Board of India (SEBI) to start the process of selling some of the embattled conglomerate Sahara’s real estate assets in the country to refund millions of investors. Sahara, a household name in India as the former main sponsor of the national cricket team, has major hotels overseas including the Plaza in New York and the Grosvenor House in London, besides vast real estate assets in India. Its founder Subrata Roy was arrested in March 2014 after the company failed to comply with a court order to refund money raised from millions of small investors by selling them bonds later ruled to be illegal. The country’s top court in June last year said the group needed to repay the entire Rs. 36,000 crore the court says it owes investors in illegal bonds.

Sahara has submitted to officials a list of 86 properties which it claims are worth Rs. 40,000 crore. However, the firm claims that it has not been able to find buyers for the properties. The proceeds from the property sale will be used for securing the bail of Sahara chief Subrata Roy. Roy joined Sahara Finance, a struggling company, in 1978, which ran a chit fund and took it over. He changed its financial model. Sahara is said to have used the financial model of much older Peerless Group. They are termed residuary non-banking companies (RNBCs) that accept deposits of very low amounts. In the 1990s, Roy moved to Lucknow, which became the base of his empire. His Sahara City project covering 170 acres was launched in the 1990s. From there, it went on to become the largest conglomerate of India with a diversified range of business interests. The company now has interests in real estate, media, entertainment, tourism, healthcare, and hospitality.

The Hindi newspaper ‘Rashtriya Sahara’ was started in 1992. In the late 1990s, the ambitious Aamby Valley City project near Pune was initiated. In 2000, Sahara TV was launched which was later renamed Sahara One. In 2003, Sahara started three weeklies: Sahara Time (English), Sahara Samay (Hindi), and Sahara Aalmi (Urdu). In 2010, Sahara purchased the iconic Grosvenor House Hotel in London and in 2012 the historic Plaza Hotel in New York City. Sahara claims to have a workforce of more than a million, including salaried employees and field workers. In 2013, 121,653 of its employees gathered in Lucknow to sing India’s national anthem, setting a world record. Sahara is said to have 29.6 million investors, representing about 8.5% of all households in India.

Since March 2014 he is under judicial custody with a bail amount of 100 Billion Indian Rupees, Sahara India Pariwar – Issuance of Optionally Fully-Fully-Convertible Debentures, by his two group companies, Sahara India Real Estate Corporation Ltd. (SIRECL) and Sahara Housing & Investment Corporation Ltd. (SHICL). On 26 February 2014, the Supreme Court of India ordered the arrest of Subrata Roy for failing to appear before it in connection with the Rs. 24,000 crore deposits his company has not refunded to investors. He was eventually arrested on 28 February 2014 by Uttar Pradesh police on Supreme Court’s warrant, in a dispute with Market Regulator – SEBI. The Supreme Court of India granted him interim bail for the same on 26 March 2014 on the condition of depositing Rs. 10,000 crore with the market regulator SEBI. His deposit of Rs. 10,000 crore has not been made and Roy is still in jail. As of August 2014, Roy was trying to sell some of his hotel properties to raise enough money. Hope he managed the required funds by now. Roy’s case, which featured in the Netflix series Bad Boy Billionaires, is among stories of fallen business tycoons in Asia’s third-largest economy and India’s efforts to go after the rich and famous who failed to pay their dues. Roy, who at different times owned an airline, formula one team, cricket team, plush hotels in London and New York, and financial companies, stayed in jail for over two years and is currently out on parole since 2016. Roy has so far deposited over Rs. 15,000 crores, SEBI said in the court filing. The court has not yet decided when the case will be heard next.


 

Dr Vaidehi Tamanhttp://www.vaidehisachin.com
Dr Vaidehi an Accredited Journalist from Maharashtra is bestowed with Honourary Doctorate in Journalism, Investigative Journalist, Editor, Ethical Hacker, Philanthropist, and Author. She is Editor-in-Chief of Newsmakers Broadcasting and Communications Pvt. Ltd. for 11 years, which features an English daily tabloid – Afternoon Voice, a Marathi web portal – Mumbai Manoos, monthly magazines like Hackers5, Beyond The News (international) and Maritime Bridges. She is also an EC Council Certified Ethical Hacker, Certified Security Analyst and is also a Licensed Penetration Tester which caters to her freelance jobs.

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