Sahara Group chief Subrata Roy passed away on Tuesday aged 75 after a prolonged illness. According to the company, Roy was admitted at Kokilaben Dhirubhai Ambani Hospital and Medical Research Institute and passed away due to cardio-respiratory arrest.

"It is with profound sadness that Sahara India Pariwar informs the demise of our Hon'ble 'Saharasri' Subrata Roy Sahara, Managing Worker and Chairman, Sahara India Pariwar," the Group said in a statement. "His loss will be deeply felt by the entire Sahara India Pariwar. Saharasri ji was a guiding force, a mentor, and a source of inspiration for all who had the privilege to work alongside him." Sahara India Pariwar is committed to upholding Roy's legacy and will continue to honour his vision in driving the organisation," it added.

Roy, who was mostly clad in a black waistcoat with a tie, had built a multi-billion empire worth more than ₹62,000 crore with operations spanning from financial services to real estate, media and entertainment, and aviation. In the late 2000s, however, the Sahara Group maverick was embroiled in several legal as well as financial controversies.

Hall of fame

Born in June 1948 in the Araria district of Bihar, Roy started his entrepreneurial journey through two ventures that failed eventually.

In 1978, he started Sahara Finance, the financial arm of Sahara Group. Through the venture, the group took investments from small investors with an assured return of money. The investment amount was as low as ₹1 which attracted several small investors such as rickshaw pullers and tea stall owners to invest in the scheme. Over the years, the Group employed millions of agents who would sell the scheme to small investors.

The scale of Roy’s success can be gauged from the fact that he has been touted to be amongst the most influential businessmen in India and Sahara Group was once the second-largest employer after the Indian Railways. During his active years, Roy scaled Sahara Group to new heights and diversified the group into real estate, aviation and media and entertainment.

While the Group's primary business was focused on chit-funds, in 1992, the Group started its ambitious Aamby Valley project near Pune. Spread over 8,167 acres of land in Lonavala, the project housed 600-800 luxury bungalows priced between ₹5 crore and ₹20 crore. According to reports, more than 700 properties have already been sold to high-net-worth individuals. The project also includes private villas, a cricket stadium and an operational helipad.

In 2000, Sahara Group forayed into media and entertainment and started Sahara TV which was later renamed Sahara One. Following this, the Group also launched a movie channel called Filmy and three weeklies namely Sahara Samay, Sahara Time and Sahara Aalmi.

The company also started an airline called Air Sahara, which was sold to Jet Airways in 2006 at a value of more than $500 million . In 2010, the Group also acquired London’s Grosvenor House Hotel and the historic Plaza Hotel and Dream Downtown Hotel in New York.

In 2010, the Group forayed into sports and bought the Pune franchise of the Indian Premier League. The Group paid $370 million for the franchise, which is to date the highest bid paid by any company. In 2018, however, the Group pulled out of the franchise amidst financial discrepancies.

House of Cards

While the Group was amongst the most successful businesses in India, it witnessed several run-ins with financial regulators during the 1990s. The Group had been in the spotlight of several financial discrepancies. In 2008, the Reserve Bank of India ordered Sahara Group to stop accepting money from the public as deposits. By then, the Group already had deposits worth ₹20,000 crore.

In 2009, SEBI (Securities and Exchange Board of India) launched an investigation against the Group in a case related to the initial public offering of Sahara Prime City. According to the market regulator, the Group had been accepting optionally fully convertible debentures (OFCDs) against cash from investors, which was against the SEBI’s norm of cheques or demand drafts.

In 2010, the market regulator barred Sahara Prime City from raising more money from the public. In response to this, Roy sent more than 100 trucks with 30 million documents to SEBI’s office, while calling the markets regulator responsible. The market regulator later revealed that it was unable to trace several investors mentioned in the documents.

In 2007-08, Sahara India Real Estate Corporation (SIRECA) and Sahara Housing Investment Corporation raised money through OFCD, without following SEBI’s norms. The case went to the Supreme Court.

In 2014, the apex court sent Roy to prison, while asking the two entities to refund the money to more than 3 crore depositors with 15% interest. The Group was asked to deposit an amount of ₹24,000 crore into SEBI’s account. However, due to lack of claims this amount has increased to ₹25,000 crore.

Sahara Group chief Subrata Roy

From multi-billion dollar businesses to jail: The rise and fall of Subrata Roy Sahara