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In Sahara Desert- Distress Hours
Once upon a time, Sahara’s Subrarta Roy- a friend to all who came calling-whether a matinee idol in his 80s or a sports star in her teens, self bestowed title- “Sahara Shri”- the sponsor of the Indian cricket team and a group headed by a colourful, flamboyant CEO hobnobbing with Bollywood stars and cowbelt politicians could boast of having friends in high places. Today in this distress hours, there seems to be few people who he can turn to in his hour of distress.
For the sleepy Lucknow of the 1990s whose favourite past-time seemed to be reminiscing the city’s long gone glory days, Subrata Roy Sahara brought a cash of heavy bling and some more. Sahara has stayed afloat for more than 35 years despite repeated regulatory onslaughts. The first setback was in the late '90s when RBI slashed the discretionary investment powers of its finance firm. The next blow came in 2006 when its depository services firm had to be shut down. The big jolt came in 2008 when RBI left the finance company, the group's money-spinner, with no choice but to wind down. But, soon Sahara advertised a mega township venture spanning across cities. The absence of a regulator and spiralling property prices had driven the foray into real estate.
The high-profile saga -- which saw the arrest of flamboyant Sahara group chief Subrata Roy, who calls himself "Managing Worker" of his business empire -- has seen many dramatic events along the way including many emotional pitches by Sahara group, which claims to have a networth of over INR 68,000 crore and assets worth over INR 1.5 lakh crore.

SEBI VS Sahara

The Sebi-Sahara case itself comprises staggering numbers like collection of over Rs 24,000 crore from three crore individuals. The case also has brought to headlines numerous financial jargons like OFCDs, DRHP and RHP, as also numerous innocuous sounding names like Kalawati, Hardwar and the famous 'Roshan Lal'.

Is there any way-out to regulate their micro finance business/raising public deposits in real estate?? Though there are not many legal options available, however, Sahara could have registered their public raising schemes in real estate under Collective Investment Scheme with SEBI. Perhaps, what many in Sahara did not realise was that circumstances were turning against them. Also, there were cardinal mistakes by a group that often operated in the regulatory twilight zone. A shadowy empire giving up closely monitored financial services to slowly venture into real estate would not have necessarily drawn the attention of unfriendly politicians and a no-nonsense SEBI.
Though it's a pity that more than a million would lose their jobs if Sahara shrinks
In the recent past, SEBI has discovered several entities such as Sahara, Rose Valley etc. been deployed to raise capital from investors without following the prescribed regulatory framework. To safeguard the interest of hapless investors and curb the proliferation of unregulated schemes being operated, SEBI has brought under the scope of the CIS Regulations all such schemes launched by any operator in any field as long as they fell within the four corners of the definition of a CIS.
Recent amendments to the SEBI Act provide more powers to SEBI for enforcement against unregistered pooling vehicles. Under the amendments SEBI has been granted powers to regulate any scheme or arrangement, if such scheme is not registered with SEBI, and involves a corpus of INR 100 Crore (INR 1 billion) or more. This power can be viewed as an attempt to limit any challenges from parties contending that a particular fund raising activity is not covered under the purview of CIS Regulations merely because it is not specifically covered under Section 11AA of the SEBI Act. Further, SEBI has now been granted the authority to carry out search and seizure operations and attach assets in case of non-compliance.
If  you are interested in further details and inclined to know the procedure of CIS registration, click on the link below or contact us:


  1. Thank you. That was really informative and a very helpful summary of the Sahara case.

  2. Drama on the move since years, I haven't seen such case till date where a man is jailed even before proven guilty and a case where the allegators themself aren't able to prove themselves.

    1. @ankit- Supreme Court has the power to do so under Article 141 of the Constitutiion.....About prosecution, there is still confusion that whether SEBI has the entire case or any other authorities are also to be involved...

  3. सवाल ये है कि कि आखिर सेबी अभी तक गारंटी के 5 हजार करोड़ में से सिर्फ कुछ लाख ही क्यों वापस कर पाया क्या कोई पूछेगा?

    1. @Jignesh- Supreme Court has already asked the same question to SEBI about the status of refund to small investors and as usual SEBI has asked more time to reply back on the issue of time they requisite for distribution of funds to small investors.


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