Sahara chief in trouble again

ePaper Version:
By AJIT CHAK: It may take a lot of time to find out how and why Subroto Roy amassed his huge wealth. With his parole cancelled the Sahara Managing Worker may have to go back to jail as the court is apparently unsatisfied with the manner in which the company is dealing with its refunds and deposits and half a dozen properties. The ending to the Sahara Saga is indeed a sad one but it was bound to happen as the Sahara group did not have any very strong business model. Nevertheless Sahara was the only company that did not shot office and fly by night when the Reserve Bank had cracked down on NBFCs a few years ago. This was in the late 1990s which saw several companies fly from Lucknow and Patna and other such states. They had the same modus operandi, collect funds from the public and then invest it in real estate and other such projects. There was the Sahu group, which still exists today and played the safest game. There was Kuber which was supposed to be the safest bet in the city and the owner was arrested and his real estate assets taken over by other real estate companies.

These made huge profits in the boom that followed the bust. There were several others like Incan and Maegabyte where the proprietors even featured in the serial IndiaÔÇÖs Most Wanted after fleeing Lucknow. These companies had a strategy which backfired from day one. To get deposits from the public they used to promise huge rates of interest far higher than any bank would give. The money was supposed to be invested in business to earn phenomenal profits and then it would be paid back. The system worked as far as collection went and then the business model collapsed. The companies found themselves in a catch 22 situation. The found they could only repay the original deposit holders by taking money from new deposit holders but while the bubble burst for many, in SaharaÔÇÖs case the company continued to survive. It set up a media group and a films division. Subroto RoyÔÇÖs lifestyle became the envy of all and even Saddam Hussein would have preferred to live like him rather than live in Iraq. There were rumors too that Sahara became a safe haven for senior officials and powerful politicians with black money. It allegedly became a front for them to own malls and real estate and a CBI inquiry into the group and its assets and those who have made huge properties through it may reveal a lot.

eMail: cajit2001@yahoo.co.uk

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