Bharat Hain Hamara, cash-less Sahara
Shorn of the glamour and power he once wore on his sleeves like diamond cuff links, Subrata Roy, India’s self-styled baron of the poor, is now pleading a near-cashless situation of his conglomerate.
Roy, the only Indian corporate captain to have spent two long years in Delhi’s maximum security Tihar prison for unpaid dues, has published a multi-language advertisement in Indian newspapers. The campaign, titled “financial issues” spells out six reasons for the cash crunch the group is facing currently and assures readers that despite “the very bad and negative impact on the group”, it would clear all “obstructions by 2019-20” and that its “assets are three times liabilities”.
This is the latest among many attempts by Sahara to make itself heard.
Late last year, Sahara launched a television campaign, shot by Pradip Sarkar of Parineeta fame, showing a wide canvas with booming drums, men and women dressed in black and white like lawyers running across expansive flyovers. The campaign eventually ended with what was once popular in India as Sahara Salute, the right arm fixed on the left shoulder like greetings of Roman kings. Roy was in the frame, the gutsy tycoon even lending his voice to the campaign at the end. In some ways, the campaign hinted that the conglomerate could regroup its workers and strength to get into new zones of business not banned by the market regulator.
Soon after the campaign, Roy completed a hurricane nationwide tour of 18 cities to meet his employees. In Raipur in October, Roy - using a battery-operated microphone - told his employees at the airport: “Sahara is your Sahara (hope), I am here to assure you that we will soon bounce back. We are going through troubled times, testing times. But do not lose hope. We are world’s largest emotionally bound family.
“As a chief guardian of the family of more than 12 lakhs Sahara India Pariwar (family) it is my duty to protect your interest and future as your father. I am with you, even in jail I thought about you, I am always thinking about you. I have been to jail, as I am paying happy tax for being a guardian,” said Roy.
Before the campaign, Roy, then in Asia’s largest prison and crying hoarse for justice, had turned into a philosophical author. The first of his trilogy, Life Mantra, was offered on February 1, 2016 - Sahara Foundation Day - to the rich and commoners in 5,000-plus cities across India. India;s World Cup winning skipper, Kapil Dev lent his shoulder and support to the group at the event in Noida near Delhi.
Roy, who once sponsored anything and everything under the Sun (from cricket teams to homes for nuns of Mother Teresa), says he wants to be heard and that he wants to start new business by the yearend and the market regulator must return the Rs 20,000 crore it has in its kitty from Sahara because the cash is largely un-utilised. On paper, SEBI has managed to refund only Rs 91 crore to unpaid Sahara investors over the last five years.
“What do we do to prove our honestly? We are fighting with our back to the wall, we are in a very unfair situation,” a top Sahara official told BTVI. The official, speaking on conditions of anonymity, said SEBI is repeatedly skirting the demand for return of cash by saying the matter is being heard by the Supreme Court. Sahara needs the cash badly. Roy, who critics claim runs his company like a cult, has been travelling across the country in his private jet to assuage employees who have remained jobless for years.
Roy is confident of emerging unscathed from the slugfest even though he knows if sells his marquee assets and SEBI does in fact, return the funds, Sahara will find it challenging to acquire the properties at competitive prices. In a 14-page letter he once wrote to his staffers from prison in 2016, Roy said, “Keep your morale up, we shall overcome. We will emerge clean from the current crisis, kindly do not get agitated if salaries are delayed because bank accounts are sealed.”
One of India’s most influential persons who walked among a bevy of guards and women wiping sweat and dust off his face, is trying hard to keep his chin up. Critics have linked his case to that of flashy liquor baron Vijay Mallya, now on the run from India and holed up in his palace near London.
Like Mallya, Roy has an opulent lifestyle. He has a few choppers and a fleet of private jets. One of his mansions is modelled on the White House and another on the Buckingham Palance. Roy has always been in the news for his larger-than-life image, colourful lifestyle and considerable political connections. Veteran Bollywood star Amitabh Bachchan is among his friends, so is former British Prime Minister Tony Blair. His sons weddings in 2004 was billed as the Indian marriage of the century, then Prime Minister Atal Behari Vajpayee also flew down to bless the newly-weds.
But not many have compared Roy with Mallya, ostensibly because India’s apex court has noted how Sahara has paid up a large chunk of the disputed amount to SEBI.
The market regulator has hired a warehouse to store truckloads of documents (in original) sent in by Sahara proving the repayments made. Senior SEBI advocate Arvind Dattar, is on record saying all forms have not been evaluated and a large number of advertisements in both big and small dailies failed to elicit any worthwhile response from the market. Around 4 years after the apex order, the regulator is yet to start personal verifications of Sahara investors to conclude who has got refund.
Why it could not the verification process, SEBI has not answered.
Sahara wants to foray into education, claim sources. The group wants to target the poor, as its earlier controversial ventures. Sahara, BTVI has learnt, has put in place a team, drawn from some of the top universities and colleges across India and even abroad. This team has designed an online education business totaling 14,000 hours of edited software for students. It will be offered at a minimal cost to millions of subscribers in small towns and villages.
The group is confident that its online programme that will be easy to operate and boost the education standards in the country’s hinterland. Education is big business in India. KPMG and Google jointly estimate India’s online education to be a $1.96 billion industry by 2021, the paid user base growing from 1.9 million in 2016 to 10 million by 2021. India’s education market pegged at a little over $25 billion with a 22 percent annual growth. The online market is pegged at $2 billion.
Besides education, Roy is giving finishing touches to a host of new plans. These will also include setting up hospitals and low cost housing for the poor, which are in high demand across India. Despite selling some of the real estate parcels as part of SEBI's litigation, Sahara continues to have significant land bank across India. Roy has also shown keen interest in aviation. Roy - claim industry insiders - is not keen to handover all his private planes and the license and not want to expand. Roy is seeking advice from former airline honchos. He has renewed its focus on media, recalling its former news channel head to ramp up numbers in the Hindi heartland.
But first, Sahara must resolve its highly contentious case with SEBI.
Sahara continues to claim it has already repaid majority of the investors. SEBI has not offered any explanation, except pushing the Subrata Roy-led group in the Supreme Court to pay up the rest of the amount. In various meetings with his employees across India, Roy has expressed confidence that the cash in SEBI-Sahara account “will come back to it after verification of documents about the investor repayments”.
Sahara says it in 2012 had provided documents proving repayments.
Sahara, banned from raising any funds as proceeds from any sale of its assets that will directly go to the SEBI-Sahara account, wants the cash badly for its new scheme of things. Sahara claimed it’s cash position turned precarious due to a Rs 15,000 crore hit after it refund Rs 22,000 crore to investors in just 6 months during 2012. Else, it would have paid in small amounts over 16-17 years under the original plan.
Sahara also claims it paid Rs 725.97 crore as TDS (tax deducted at source) to the Income Tax Departments on the interest which along with investment was repaid to 95 percent of the investors, between 2009-10 and 2012-13. The income tax authorities had found that the beneficiary investors were existent and accordingly confirmed the repayments made in those particular years.
Roy, who has often called himself a proud Indian, has said his group can cough up enough cash if asked to scrap the barrel, explaining how its overall liability was Rs 62,104 crore as on December 31, 2014, while assets were Rs 1,77,229 crore.
Roy badly wants his case with SEBI to end. But that his not happening. Stuck with him are an estimated 14-lakh members of his Sahara Parivar and crores of customers.