Subrata Roy is gone, but what happens to millions of depositors?

Subrata Roy exchanges pleasantries with Sachin Tendulkar at Wankhede Stadium on October 9, 2002. Pic/Atul Kamble

Sahara India founder Subrata Roy succumbed to his multiple illnesses at a Mumbai hospital, leaving in the lurch numerous depositors in his multi-billion financial empire. As per the company's own claims, Sahara India conglomerate of chit-fund firms has as many as 9 crore depositors, who gave it the profile of the country's biggest Non-Banking Finance Company (NBFC) with an unparalleled worth of R2,59,000 crore. By showing all its village-level collection agents as "employees", the company had also proclaimed itself at the biggest employer after the Indian Railways.

Poorest of the poor

A bulk of these depositors happened to come from the lowest socio-economic strata, largely dependent on daily frugal earnings, part of which they happily shelled out to Sahara in the hope of making a fortune that the company would systematically project under its various chit-fund schemes. The company proudly claimed that it brought banking to the doorstep of those at the lowest economic rung who had no access to formal banking.

It was only when an upright SEBI chief decided to take up the plight of these hapless depositors that the Pandora's box was opened. The company did move heaven and earth to circumvent the truth and went to the extent of unloading 127 trucks with about 32,000 cartons before the SEBI office in 2013, when Roy was asked to submit details of his then 3 crore depositors.

Eventually only 4,600 depositors turned up to collect their dues from SEBI, while others could not be traced from the particulars mentioned in the deposit vouchers and other documents. Where so many depositors vanished remains a mystery, even as there was suspicion of "benami" transactions. Even a decade and a half earlier, when a young income tax assistant commissioner in Lucknow sought details of depositors from Sahara, he was bombarded with all kinds of counter-queries.And the next thing one knew, the upright IRS officer was shunted out of Lucknow to some remote corner in South India.

Countrywide clout

Sure enough, the clout Roy enjoyed with the country's who's who came in handy to get him immunity from laws until SEBI chose to join issues with him and take matters to the logical conclusion, thanks to the intervention of the Supreme Court. It was not as if effort was not made to hoodwink the court too. But a Supreme Court bench of Justice K S Radhakrishnan and Justice J S Khehar took Roy and his company to task for not complying with their orders to return money to the depositors.

Roy was sent to jail in 2014, but was granted parole after two years. He was sent back to jail in 2020, when SEBI urged the apex court to cancel his parole for non-compliance of its directive to pay R62,000 crore to the regulator, so that the money of depositors could be returned. Eventually he got a fresh parole on the death of his aged mother and had since been out of jail.

Fire sale

Eventually, he sold away his prized properties including famous hotels in the US and in London, besides his Sahara Airline to meet the legal obligations. However, it was the depositor who still remained deprived of his legitimate money of which he was duped.

While carrying out a fact-check at the grassroots level in rural corners of some Eastern UP districts where the company's operations had always thrived, I encountered hundreds of depositors, who alleged that the deposit certificates issued by the company were openly dishonoured by the very Sahara India offices from where these were issued to them.

"When we went to get these term deposit certificates encashed as per the maturity time entered, we were shoed away by the same branch that had issued these certificates us. They flatly told us that the certificates were fake," complained many depositors in Barabanki, Sitapur and Gorakhpur districts. Each one of these depositors were armed with certificates showing deposits of Rs 16,000 with the promise of a maturity amount of Rs 1,00,000 after five years.

Asked why did they not approach the local police or higher civil authorities like the district magistrate, one of the depositors told this scribe, "The police not only refuses to hear anything against Sahara but more often than not, depositors are warned that they would be booked for making ‘false' allegations against a company like Sahara, which sponsors top Indian cricket events."

Another depositor in a village in Basti district said, "I made two trips to the district magistrate's and the SSP's offices, but could not get access to the officers; the whole day got wasted on both occasions and I had to forego my earnings on both the days. How can I afford to even get my tale of woe across to higher authorities?"

Whitewashed with cricket

Fact remains that top cricketers and film stars of the country often remained at the beck and call of Subrata Roy, whose clout with politicians of all shades as well as top bureaucrats remained unmatched until he was sent to jail.

Sponsoring cricket was believed to be less on account of the love for the game than for lending greater credibility to the company. The popularity of the game and the fan-following of many cricket icons, who were proudly displayed in the company's advertisements, made it easy to convince small-time depositors to shell out their hard-earned savings into "high-sounding lucrative" financial deposit schemes, promising ‘El Dorado'.

While a bulk of the poor depositors have apparently given up hope of retrieving their hard-earned money, lakhs of such depositors are still hoping against hope that some divine intervention will get them justice. No one knows how many of them are there, as the company has never been open about their numbers. Yet, there can be no denying that Roy's death may close the chapter of that dying hope.

The company was essentially a "one-man" show of a ‘showman' who could be best described as a financial juggler, who excelled in the art of selling dreams to those who live in penury and whose virtue is illiteracy.