The Enigmatic Genius Behind India’s Largest Ponzi Scheme
In a shocking turn of events, Roy, a prominent figure in India’s business world, was accused of orchestrating one of the largest Ponzi schemes in the country. Despite never being sentenced, he passed away before any judgment could be rendered. His legacy remains shrouded in mystery, as many investors remain untraceable.
Born in 1948 in Araria, Bihar, Roy studied at prestigious schools in Kolkata and Varanasi before pursuing a diploma in mechanical engineering. His father’s early death meant financial hardship, but it also sparked his entrepreneurial spirit. Starting with a snack business from a scooter, Roy eventually moved on to selling electric fans under the brand name Air Sahara.
In 1976, Roy took over Sahara Finance, a struggling company. The mid-1970s were a tumultuous period in India, with soaring inflation and rising unemployment pushing people towards alternative investment options. This fertile ground for dubious financial schemes led to the rise of dubious financial schemes, including the infamous Sanchayita scam in West Bengal, which affected over 131,000 people before collapsing in 1980.
Roy’s fortunes changed when he began investing in the growth sectors of the 1980s and 1990s. Sahara India Pariwar, the umbrella for his businesses, expanded into real estate, media, aviation, and hospitality. By the early 2000s, Roy was a fixture among India’s business elite.
Despite his wealth and influence, Roy’s lifestyle was far from humble. He described himself as a "simple human being" and projected the image of a benevolent tycoon. His parabanking model, which allowed shopkeepers and panwalas to save through his businesses, earned him the respect of many. However, success bred carelessness.
In 2009, Sahara Prime City filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for its initial public offering (IPO). The disclosures revealed that two Sahara group firms—Sahara India Real Estate Corp. (SIRECL) and Sahara Housing Investment Corp. (SHICL)—had raised nearly ₹27,000 crore from millions of investors via optionally fully convertible debentures (OFCDs), in violation of Sebi rules.
The scheme was a pyramid, possibly the largest the world had seen. At its peak, Sahara was the financial lifeline for 70 million investors, most of whom were left with nothing when the scheme unravelled.
In 2011, Sebi ordered the company to refund the money. Roy refused to comply—or even respond to court summons. Finally, in 2014, a special two-judge bench comprising Justices K.S. Radhakrishnan and J.S. Khehar sent one of India’s most flamboyant billionaires to jail.
He was released on parole after two years. Until his death in November 2023 at age 75, he continued to run his businesses. The Sahara empire, however, never recovered. And its full story, like the fate of its investors’ money, may never be known.
Reference : https://www.livemint.com/companies/people/saharas-shadow-the-spectacular-unravelling-of-subrata-roy-11746084390116.html
