What befell the boss of India’s Sahara conglomerate should be a lesson to a smart alec. Subrata Roy bit off more than he could chew.
After more than a year of misleading the Supreme Court and the country’s market regulator SEBI, he ultimately ran out of tricks and is unable to raise 100 billion rupees ($1.65 billion) to bail himself out of prison. The bail amount, which the Supreme Court prefers to call a token of his bona fide intention, may seem astronomical, but for a man heading an empire it is a trifle.
Investors in India and abroad are watching this drama to see how it ends, but nobody would hazard a guess. And the Supreme Court says it is just the beginning. Once Roy comes out of prison, he will face a contempt of court charge for ignoring court summonses for months.
His Sahara group tried to raise part of the bail bond by asking employees to contribute up to 300,000 rupees individually, but that apparently failed because the management feared it would violate provisions of the law regarding raising money from the public.
His beneficiaries in Bollywood, or the Bombay film industry, are loath to help him at this critical time for fear of media focus shifting to a Sahara-Bollywood nexus.
A month ago a group of film producers and actors held a press conference denouncing a “witch hunt” against Roy who they said helped many in their hour of need. When they were asked by the media to identify some in the industry who benefited from his largesse, they kept quiet.
Roy could not have built an empire without greasing the palms of politicians. But not one of them has come to his help for fear of tainting themselves at election time.
An intriguing aspect of the case is the absence of a clamor for return of funds from the holders of bonds that SEBI declared illegal.
A scrutiny of the details of the so-called refund of money by Sahara to bond holders led to fictitious names and addresses. In fact SEBI did not initiate action on the complaints of investors, but on grounds of Sahara violating company laws on raising funds from the public.
So who are these bond holders? Or has SEBI stumbled on a massive money-laundering scheme? All this can be made clear only through a criminal inquiry into the case. Until then, happy jail time, Saharasri!
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