Subrata Roy: Who made it large, drop by drop in good and bad times

His was a story that can sound like an urban legend, but Subrata Roy literally made it large, drop by drop.

What he started with a borrowed capital of just Rs 2,000 in 1978, kept growing for over three decades and became a corpus of tens of thousands of crores with contributions as low as Rs 10-20 each from investors, but then it started crumbling down, brick by brick. Roy, who died in Mumbai on Tuesday after a prolonged illness at the age of 75, continued to make it large, even while battling it out in courts and before regulators.

When asked for proof of payments collected from his crores of investors and the repayments made to them with returns, he famously sent 128 trucks containing more than 31,000 cartons of documents to capital market regulator Sebi’s headquarters in Mumbai.

Flummoxed by the humongous task of sorting and verifying tonnes of investor papers, the regulator Sebi had to put them in a huge hired warehouse having ‘automated robotic system’ document handling and safe vaults with 32 lakh cubic feet of storage capacity. In another mammoth task later, Sebi had to engage a server hosting vendor to provide electronic data storage and web access services for a database of 20 crore scanned pages in the high-profile Sahara case.

The Sebi saga began with just two sets of complaints — one from a small group of ‘investors’ and another from an individual named ‘Roshan Lal’ .

Before it all started falling apart, the Sahara portfolio comprised financial services, real estate, aviation, marquee hotels in London and New York, an IPL cricket team and a Formula One racing team as also sponsorships for the country’s cricket and hockey teams. And then, there was one of the most ambitious projects — a hillside township in Maharashtra, Aamby Valley, which was supposed to have villas for virtually all who’s who of the country from fields of cricket to films to politics where he had many ‘friends’.

It was often alleged that the tens of thousands of crores of rupees that Sahara had collected actually belonged to many politicians, cricketers and Bollywood stars, but there has never been any proof of this.

Aamby Valley was one of the several projects undertaken by the group’s real estate arm Sahara Prime City Limited and it was a proposed IPO of this company in 2009 that led Sebi to launch a probe.

When Sebi was looking into the draft prospectus filed for the IPO, it received a complaint on December 25, 2009, from ‘Professional Group for Investor Protection, which alleged that a Sahara group firm, Sahara India Real Estate Corporation Limited was issuing convertible bonds to the public throughout the country for many months and the same was not disclosed in the draft prospectus.

A similar complaint from Roshan Lal was also received by Sebi through the National Housing Bank vide a letter dated January 4, 2010.

The number ‘4’ thereafter went on to become a key date in the Sebi-Sahara saga. Arvind Datar, a counsel for Sebi once said, “It all started with Roshan Lal, whom we have never seen him, from Indore who on a colder winter morning decided to write a letter in Hindi to Sebi”. Little did Lal know that his letter could set in motion a litigation that seemed to be almost endless and little did he know that exactly four years and three months to the day after the letter that Roy would be sent to Tihar jail. When Sebi issued a notice to Sahara, they went to the Lucknow bench of the Allahabad High Court and got a stay. The case was posted on January 4. Roy was also sent to jail on March 4, 2014, Datar appeared for Sebi for the first time on 4th, and the main affidavit of Sahara was given on 4th, according

to Datar.