Subrata Roy's arrest: Sahara Group's diverse businesses in losses, flagship's future in doubt

Written by ENS Economic Bureau | New Delhi | Updated: Mar 1 2014, 16:55pm hrs
Subrata Roy SaharaSahara chief Subrata Roy, who was arrested on Friday, is escorted by police to a court in Lucknow. (Reuters)
The Sahara Group that claims to have a total net worth of Rs 68,174 crore on its website had, till the end of FY09, disclosed a revenue of less than Rs 4,500 crore from its 10 biggest companies, including that of Sahara India Financial Corporation, Sahara India Commercial Corporation Ltd and Sahara One Media and Entertainment Ltd.

Most of them, however, made losses, as per the data disclosed in the draft offer document of Sahara Prime City Limited filed with Sebi in September 2009.

Founded in 1978, the Sahara group has, over several years, accumulated land across the country and now claims to have a land bank of 36,631 acres (which may be one of the largest held by a private entity).

Having operations spread across business such as real estate, infrastructure and housing, financial services, housing finance, mutual funds, life insurance, media, film production and distribution, information technology, medical, tourism, hospitality and consumer products, the group employs a total of 11 lakh on its rolls.

The future of the groups flagship company Sahara India Financial Corporation (SIFCL) is now in the dark as the Reserve Bank of India through an order dated June 17, 2008 had directed SIFCL to stop accepting instalments in existing deposit accounts.

The central bank also restricted it from accepting any new deposits that mature beyond June 30, 2011.

While the central bank had also directed SIFCL to repay all deposits that and reduce its aggregate liability to depositors to zero on or before June 30, 2015, the group has over the last few years acquired three hotel properties Grosvenor Hotel in London (2010), Plaza Hotel (2012) and Dream Hotel (2012) in New York for an aggregate sum of Rs 9,000 crore. The group had, however, exited the aviation sector and had sold Sahara Airlines for Rs 2,000 crore to Jet Airways in 2007.