Sahara: The Untold Story - Book Review

The story of the most bizarre Indian business

 

Sahara: The Untold Story by Tamal Bandyopadhyay is a unique book. It starts and ends (on the back cover) with a strongly worded statement from the Sahara group. Perhaps this is also the first book published in India where both, the author and the subject, agreed on 'limited information’ part in the book. Bandyopadhyay’s use of a term like ‘India’s most secretive’ for the Sahara group explains why this book contains ‘limited information’. The Sahara group had approached the court to stop publication of the book. However, later it withdrew the case on the condition that it should be allowed to print its own disclaimer in the book.  
 
The book depicts the 37-year journey of India’s most ‘secretive’ and unlisted ‘conglomerate’, the Sahara India Pariwar and its chief Subrata Roy, through the eyes of a journalist. However, the book is not merely about Sahara group or its chief Subrata Roy. It tells us about the financial world’s dark secret—shadow banking. It shows how an all-powerful group can easily open a new door when an old one closes. 
 
When it comes to raising money from the public, one cannot ignore the phenomenon called Peerless and residuary non-banking company (RNBC). Both Peerless and Sahara (in the initial stages) acceded to the demands of the Reserve Bank of India (RBI). Peerless fell in line and restructured its board and refunded money to investors. Sahara, on the other hand, while making amends with RBI’s ‘instructions’, was raising money through its optionally fully convertible debentures (OFCDs).  
 
And then, one fine day, Sahara decided to enter the capital market with the strange OFCD offering and thus dug its own grave. 
 
According to Bandyopadhyay, the Sahara group chief had under his belt 4,799 establishments, almost equal to the universe of listed companies in India. “This might have gone unnoticed but for Roy’s plan to list one of his group companies, Sahara Prime City Ltd. On page 640 in the disclosure section of the 934-page draft red herring prospectus (DRHP) of Prime City filed before SEBI (Securities and Exchange Board of India), one critical piece of information was tucked away which the market regulator latched on to. 
 
This was a certain tax-related issue in regard to OFCDs, which Sahara India Commercial Corp Ltd (SICCL) was fighting out with the income tax authority. This was related to a Rs35.57 crore disputed income tax that was imposed on the company for accepting OFCDs worth Rs20,000 crore or more from many investors through cash and not account payee cheques or demand drafts, as required under the Income Tax Act, 1961.
 
SEBI sought clarification from Sahara about the OFCDs; Sahara defied it. This started a chain of reactions that finally led to the detention of Mr Roy on the orders of the Supreme Court. Bandyopadhyay’s book chronicles all the incidents in a simple, news-oriented approach, i.e., he describes them as they happened.
 
But Sahara is not just about finance. Subrata Roy was, after all, sponsoring the Indian cricket team and counted among his friends the who’s who of India. During his visit to Sahara Shahar in Lucknow for an interview with the group chief,  Bandyopadhyay got a first-hand account of Mr Roy’s penchant for glamour and his association with film stars, cricketers and politicians. Asked about why he chose the company of actors and cricketers, Mr Roy told Bandyopadhyay,  “We have to take care of human psychology in every aspect—whenever the performance is strong, the faith is more. Renowned people give them security. Glamour plays a positive role. People jump on to film actors, they go mad. We believe in glamour.”
 
Overall, the book is a good read. The book, which was finalised before Mr Roy was jailed, also tries to predict the future growth and the possible route that Sahara group may take. But, for that, you need to read the book till the end.
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    COMMENTS

    Veeresh Malik

    5 years ago

    Months later hardly any unhappy unpaid depositors have come forward to claim refunds it seems.

    MOHAN

    5 years ago

    Another untold story:

    Refund Rs 49,000 cr to investors: SEBI to PACL


    http://www.business-standard.com/article...

    dip

    5 years ago

    Subrata Roy must be credited for the tremendous PR abilities. He created a few things. He went wrong in underestimated the 'System'. Taking on the judiciary is a most audacious way was start of his downfall. Knee jerk reactions?

    What is illegal is subject to today's law. Money laundering? Difficult to believe as no politician worth his/her salt will deposit his money with a third person. Will buy the book.

    Essential on War for Business: Book Review

    Can War Teach Us To Do Business?

     

    Essential on War for Business, edited by Pritsikha Anil and extracted from the writing of the Prussian General Carl von Clausewitz, offers to bring the “key lessons from the battlefield needed to succeed in the twenty-first-century world of business.” The obvious problems with such books are that business is not war nor any other such epochal activity, business doesn’t have the same implications as war and managers are not generals. We do live in an unprecedented context, never before have businessmen been heroes. Either our definition of, or our expectation from, heroes has degraded.


    Shorn of the baggage of Clausewitz’s story, the book may offer some valuable experiential learning for specific situations. Clausewitz’s original work was based on his experiences more than academic assessments, and that delivers some good ideas. For example, “firmness has at its roots the strength of a feeling in relation to the force of a single blow; staunchness in relation to a continuance of blows,” says Clauswitz on the subject of what drives the commander of armies. How would a leader go about sensing morale? The importance of ideology; the question of morality; the question of finding worthy deputies; the importance of knowledge and strategy—these questions have interesting answers in the book.


    In Clausewitz’s discussion of the uses and conduct of a war, one can see the clear ideological line that extends up to the catastrophes of the First and Second World Wars. With frequent crises in markets and the tenuous nature of inefficient market environment, vitiated by concentrated power and inherited wealth, an analogy of war for business is probably the last thing we need. 

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    To Sell is Human: Book Review

    New age idea about that age-old challenge - sales

     

    The Daniel Pink was once a scriptwriter for Al Gore, the US presidential hopeful in 2000. He has since become a business guru; his books investigate the importance of emotion and psychology in business. Three of his books have been successive bestsellers. A Whole New Mind argued that the future belongs to those with a different kind of mind (artists, inventors, storytellers, etc.). Drive focused on what motivates us (no, its not incentives). To Sell is Human is a new age idea about that age-old challenge—sales or, put differently, about moving people to do what you want them to do.

    Pink has two points to make. One, we should realise that we are all sales people, all the time, in some situation or the other. Someone who wants to persuade you to buy a pair of shoes is no different from the parent who is trying to persuade his daughter to study harder.

    His second point is that selling has changed fundamentally because people have more information. To use an academic term, ‘information asymmetry’ between a seller and a buyer is much less now. A salesman could easily dress up his wares and pass them off as a great bargain because there was only so much you could know about them, as a buyer.
    Buying a used car, for instance, was endless haggle to overcome this asymmetry—the suspicion of the buyer and his lack of knowledge about the car he is buying. All this has changed. Today, customers are far better informed. Pink gives real-life examples of a highly successful user-car sales company that does not bargain; instead. it gets fully on the side of the buyer to create confidence and remove suspicion.

    Pink argues that using old-school techniques of selling will get you nowhere. You need to be attuned to the buyer and be clear and honest with your information. Pink ends the book with how to implement the right selling processes. This is certainly an excellent book for not only sales people but just about everybody because, everyday, we need to ‘move’ others, who are naturally characterised by inertia.
     

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    COMMENTS

    Madhur Aggarwal

    5 years ago


    This review has prompted me to
    explore the author (I searched google post reading this review)
    and I find
    Fact Dan Pink Tedx talk is one of the 10 most watched Talk.

    I have ordered the Book on Amazon kindle Bcoz To Sell is Human

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