The issuance of a non-bailable warrant (NBW) by the Supreme Court against Sahara India Group chief Subrata Roy virtually signals the downfall of a company, which claims it is the largest family (pariwar) in the world with over 10 lakh salaried employees, about 15 crore investors, and a net worth of about Rs1.5 lakh crore.
Soon after news of the apex court order flashed on news channels, there was a visible stir among the employees at the group's headquarters at Kapurthala in Aliganj area here. Groups of employees were seen huddled outside the Sahara office, animatedly discussing the fallout of the development. Though several Sahara officials this correspondent spoke to were tight-lipped and refused to even refer to the issue, a senior group official confided that "Saharashri (as he is referred to by his employees) should have gone to the Supreme Court today [Wednesday] with folded hands". He felt it was an error of judgment on his (Roy's) part not to appear in the court despite repeated warnings.
Earlier in the day, losing patience with the Sahara Group chief Subrata Roy's continuing delaying tactics, the Supreme Court issued the non-bailable warrant against him, which means he will have to be arrested and brought before the court on March 4.
An apex court bench of justices KS Radhakrishnan and JS Khehar, while noting that Subrata Roy's plea for exemption from personal appearance was specifically turned down, said: "Since we have already declined to grant exemption from personal presence … on Feb 25, 2014, we find no reason to accede to the renewal of the request made today."
Apparently displeased, justice KS Radhakrishnan said: "The arm of this court is very long. We will issue warrants. This is the Supreme Court of the land. When other directors are here, why cannot he be here?"
Several Sahara staffers personally known to this reporter admitted that they were indeed worried about their future as well as that of the company. One of them from the finance division said he feared there could be a run of investors on the company. "Most of our small investors are from east UP. We are gearing up to face some possible trouble by tomorrow [Thursday]," he said.
The sprawling 'Sahara Shahar' in the tony Vipul Khand locality of Gomtinagar where Roy lives has always been maintained like a fortress guarded by Sahara securitymen, and is out of bounds for all outsiders.
Sahara sources said Roy was at his palatial residence there, sitting by his ailing mother. On Wednesday, several reporters and news channel crews turned up at the 'Sahara Shahar' gates but were turned away.
No Sahara official or spokesperson came out despite repeated pleas from the reporters.
The apex court order is seen as a big blow to the image of "Saharashri" (Roy's self-acquired title) who is known more as a flamboyant showman enjoying the company of celebrities, including top politicians, cine stars and cricketers, rather than a corporate entity. The man who started a small chit fund business with just Rs2,000 in 1978 today presides over an empire with interests in real estate, media, entertainment, tourism health care and hospitality.
Apart from the scrap with SEBI, which ultimately dragged Sahara to the apex court, Roy has been in the news for buying iconic properties globally, including the Grosvenor House (London) for £470 million (Rs3,275 cr) besides 75 per cent stake in The Plaza Hotel ($570 m) and the Dream Downtown Hotel from celebrated hotelier Vikram Chatwal for $220 m (both New York properties for about Rs4,400 cr).
Roy also stunned cricketing circles when he started a new IPL team "Pune Warriors", investing a whopping Rs1,700 crore though the team proved to be a disaster and was finally disbanded. He has also been a sponsor of the Indian cricket team for many years now paying approximately Rs50-60 crore every year for the honour.
Roy, born in a village in Bihar but later settled in Gorakhpur, swears by his philosophy of "collective materialism" of working and growing together. The Time magazine had once termed Sahara "the second-largest employer in India" after the Indian Railways.
The group claims an investor base of 14.70 crore, though the figure is alleged to be highly inflated. Interestingly, after Sahara firms were told by the Supreme Court to hand over the investor documents to SEBI, the group sent 128 trucks with more than 31,000 cartons containing over 5 crore papers to the regulatory authority's headquarters in Mumbai.
Finding it impossible to store them at any of its offices, SEBI decided to keep them at a warehouse of Sahara Housing Investment Corporation Ltd (SHCIL), which was itself facing SEBI action in the apex court.
Now with the Supreme Court having made known its mind, it is obvious that the flamboyant Roy will have to face criminal charges for refusing to comply with various SEBI and SC orders. SEBI and the court seems convinced that the the debenture issue was nothing other than a money laundering venture. All this while Roy made sure that his companies always remained outside the regulatory watch, but overstepped with the issue of the optionally fully-convertible debentures (OFCD). Little did he know that SEBI under UK Sinha was keeping a close watch on his company's inexplicable huge transactions.