Despair still shrouds Sahara’s duped investors decades later
The death of Sahara group founder Subrata Roy has left many investors in Uttar Pradesh despondent, as they fear they will never get their money back.
Lucknow/Gorakhpur

For most of his life, Intezar Ali was a gregarious and popular man. Born in the Bastineighbourhood of Gorakhpur, Ali was 25years old when he was appointed a regional officer by the Sahara group, among the first handful of people hired by the then fledgling company.
In the eastern Uttar Pradesh town at the time, Sahara group founder Subrata Roy’s exploits were legendary, having gone from selling snacks on his Lambretta scooter to jousting with the choicest Bollywood celebrities, corporate titans and cricketers. As the stature of Sahara “shri” Roy boomed, so did Ali’s standing among his peers. He would go from house to house, convincing people to invest in the Sahara schemes by way of investments of as low as ₹20 and assuring impossibly handsome returns later. “I had 8 to 10 teams and as many promoters under me and each team had 10 collection agents,” he said, now 65 years old.
By the late 2000s, however, the tide was turning. Sahara was caught in a vortex of ponzi scheme allegations and the market regulators were closing in. Roy, the founder and chairman of Sahara, was arrested in March 2014 for failing to attend a contempt of court hearing. He got bail in 2016 but by then, the business had been wrecked, and his reputation was shot. And when Roy died late on Tuesday after a period of illness, Ali was left despondent.
“I don’t attend any events, even family weddings, and avoid public functions for fear of being besieged by investors wanting their money back,” said Ali.
He has moved out of his old neighbourhood, and lives alone because the social stigma prompted his family to shun him. “Many are now aware of a government-sponsored refund plan but we still get around 30 calls on an average. Even in my dreams I keep hearing, ‘bhai humara paisa dilao’ (please get our money back),” he added.
Such stories abound across the length of India’s most populous state where tens of thousands of people were taken in by the glamour of a local man who rubbed shoulders with the global elite, owned a fleet of expensive cars and properties such as New York’s Plaza Hotel and London’s iconic Grosvenor House, sponsored the Indian cricket team, and owned Formula One racing team and an airline. Roy was among India’s best-known industry captains and his influence among the political class was substantial.
But trouble was already brewing. In 2011, the Securities and Exchange Board of India ordered two Sahara Group firms -- Sahara India Real Estate Corporation Ltd (SIREL) and Sahara Housing Investment Corporation Ltd (SHICL) -- to refund the money raised from nearly 30 million investors through certain bonds known as Optionally Fully Convertible Bonds (OFCDs). The regulator ruled that the funds were raised in violation of its rules and regulations. The next year, the Supreme Court upheld Sebi’s directions. Sahara was eventually asked to deposit an estimated ₹24,000 crore with Sebi for further refund to investors.
Yet, bureaucratic hurdles and lack of proper records meant that the refund process proceeded slowly. Undistributed funds totalling nearly ₹25,000 crore are lying with Sebi. For many people, therefore, Roy’s death signified an additional hurdle.
Syed Shahab is one of them.
The 59-year-old was among the promoters of Roy’s Sahara Housing scheme in Gorakhpur. He opted out of the scheme in 1994 but 29 years later, he is still inundated with calls made by investors wanting their money back. “Today there is a ₹100 crore liability on me as depositors who invested funds at my request are now adamant on getting them back. Tell me, how do I return the money to them with Sahara Shri gone?” he asked.
In 1978, Roy launched the Sahara Cooperative Society after taking over a chit fund company in Gorakhpur’s Reti crossing. Nehal Khan, a local businessman, was among the first investors in the venture. “I had invested ₹5 lakh and was assured of return on maturity in 2008 but that didn’t happen. I had to sell my shop for my sister’s marriage,” Khan said.
He has little hope from the refund portal now that Roy is dead. “With Sahara Shri gone, we don’t really know whom to approach for a refund,” he said.
For people such as Pankaj Yadav -- a resident of Itaunja’s Bhajpur Digauria village on the outskirts of Lucknow – Roy’s death is a reminder of the mistake that shattered his finances. Javed Shameem, a tailor,who invested ₹50,000 2012, is also angry. “We had to sell off our property …will we ever see the money back?” he said.
As preparations were made in Lucknow for Roy’s funeral on Thursday and some politicians extolled his memory, some of his earliest investors and employees in Gorakhpur were morose, too - but not for the same reason. “Till he was alive, we still had some hope. Now, with him, our hopes of getting our money back have gone too,” said Shadab. “It is difficult to fathom what would happen next… our problems have increased further.”
