Rags-to-riches Indian tycoon Subrata Roy accused of scamming 30 million people dies at 75

Sahara India Pariwar chairman maintained he was an honest businessman

Subrata Roy's rags-to-riches rise to prominence was tarnished by claims of fund-raising scams. Bloomberg
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Subrata Roy, an Indian business tycoon who epitomised the rags-to-riches storyline, owned a vast empire and was the country’s second-largest employer before his spectacular fall over an alleged multibillion-dollar scam, has died at the age of 75.

Mr Roy, the chairman of Sahara India Pariwar, was suffering from a prolonged illness and died after a cardiorespiratory arrest late on Tuesday.

Referred to as Saharasri, he enjoyed a cult-like following, with employees and investors often bowing at his feet in respect.

“Saharasri, an inspirational leader and visionary, passed away on November 14 at 10.30pm due to cardiorespiratory arrest following an extended battle with complications arising from metastatic malignancy, hypertension, and diabetes,” Sahara India Pariwar said in its statement.

Mr Roy was born in Araria in the eastern state of Bihar in 1948 and moved to neighbouring northern Uttar Pradesh state where he graduated with a diploma in mechanical engineering.

He took up a job selling snacks and electronics to support his family after his father's death.

He founded Sahara Group, which later became one of the country’s biggest conglomerates, at the age of 29 with capital of 2,000 rupees ($24).

The company eventually grew so big that at one point it became the country's second-largest employer, with an estimated 1.2 million employees, behind only the government-owned Indian Railways.

Mr Roy's empire spread across retail, real estate and financial services sectors. He owned a Hindi-language newspaper and TV news channels.

With his popularity, Mr Roy’s lifestyle also changed. He enjoyed a lavish life, drove in luxurious cars and lived in colossal homes, among them replicas of the White House and Buckingham Palace.

His group developed a 4,046-hectare luxury township in India, with Russian tennis star Anna Kournikova as the project's brand ambassador, and acquired landmark properties such as London's Grosvenor House Hotel and New York City's Plaza Hotel.

He was a regular fixture on the society pages and socialised with the country's biggest actors, politicians, sportsmen and businessmen.

India’s former Prime Minister Atal Bihari Vajpayee, Bollywood megastar Amitabh Bachchan and cricket legend Sachin Tendulkar were among the 11,000 guests at the double wedding of his sons in 2004, considered one of India’s most lavish events.

Sahara scam and downfall

Mr Roy’s illustrious career came to an end after the capital market regulator Securities and Exchange Board of India found irregularities in Sahara’s finances in 2011.

SEBI accused his group of raising 240 billion rupees ($3.9 billion) from 30 million people through optionally fully convertible debentures, the type of long-term debt issued by a company that can be converted into shares of equity stock after a specified period, without proper approvals.

The Supreme Court directed two of his companies to refund the money raised from investors.

After he failed to obey the order, Mr Roy was arrested in 2014 and imprisoned at Tihar Jail, India's largest prison, in the capital Delhi. He spent two years there before being paroled.

The arrest tarnished his larger-than-life image and his business empire suffered a downward spiral.

In 2016, Forbes estimated that Mr Roy had a net worth of more than $10 billion. But in 2013 as the court case dragged, he claimed that his total assets were about 50 million rupees ($600,000).

Over the years, most of his properties were sold off to cover claims against the company, but Finance Minister Nirmala Sitharaman in 2021 said that Sahara still owed regulators nearly 103 billion rupees from the sum they had sought to recover.

So far SEBI has made refunds of 1.3 billion rupees to investors and holds 250 billion rupees in special bank accounts to repay the money to an estimated 30 million investors.

The ongoing case against him never reached a verdict. Mr Roy always claimed that he was an honest businessman.

Updated: November 15, 2023, 10:09 AM