Sahara: No Money, No Worry

Sahara tamasha continues

 

In early November 2014, The Mint reported that the Securities & Exchange Board of India (SEBI) had approached the Supreme Court seeking directions to be issued to the Sahara group to sell assets worth Rs47,000 crore. It may be recalled that the apex court, in a landmark judgement in August 2012, had ruled that two Sahara group realty companies that had raised funds from retail investors without SEBI approval, through a debenture-like product, must return the money to investors. The amount was then estimated at Rs25,000 crore (with interest).  

Sahara’s many manoeuvres to avoid complying with the court order landed Subrata Roy in Tihar jail, which has been his home since March 2014. For a while, in August, he persuaded the court to permit him the use of an air-conditioned conference facility to negotiate the sale of his overseas properties. But that drama ended in early October without a sale and Mr Roy is reportedly back in jail.

Meanwhile, it remains a mystery why a business group that appears to have limitless resources and opaque finances has been content to allow its founder-chief to languish in jail, for the past nine months. Or that Subarata Roy’s wife and son Susanto go on to become citizens of the Republic of Macedonia, a Balkan country, and acquire large tracts of land to start a dairy business (reported by www.moneylife.com in July 2014) in that country.

At the same time, its spending on non-revenue generating activities continues unabated. Interestingly, the film and sports fraternity, which the Sahara group cultivated assiduously, seems determined to carry on as if it is business as usual. The Sahara group’s travails may have ended its sponsorship of the Indian cricket team, but it hasn’t stopped India’s cricket captain, Mahendra Singh Dhoni, partnering with the beleaguered group to snap up the Ranchi franchise of Hockey India. Some say, it shows the cricketer’s ability to put business above reputation concerns.

Similarly, there is no impact on Sahara Force India Formula One franchise, despite the fact that both promoters—Subrata Roy and Vijay Mallya—are in deep financial trouble. In May this year, well after Mr Roy went to jail, the franchise announced an alliance with the vodka brand Smirnoff.

The only apparent change in the working of the Sahara group is that the Roy family no longer hankers after publicity and is quietly stepping down from group companies leaving them in the hands of employee managers.

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