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What is Sahara?

Sahara
What is Sahara?
  • Sahara is an Indian conglomerate which deals in finance, infrastructure & housing, media & entertainment, consumer merchandise, manufacturing and information technology.
  • Valued at an estimated $25.4 billion, it is headquartered in Lucknow, Uttar Pradesh.
  • Its Chairman and Founder, Subrata Roy, is in Tihar jail facing scrutiny for duping investors through various financial products, and possible involvement in money laundering.

The downfall of Sahara

2013
The downfall of Sahara
  • Over the last few decades, Sahara India Pariwar has been one of the most successful companies in India, providing multiple investment options to small investors.
  • Notorious for blocking investors money, problems started when its 2008-2011 term deposit plan was declared illegal, as selling time deposits through cooperatives is illegal in India.
  • The Supreme Court ordered Sahara to return ₹36,000 crore back to investors.

Sahara chief sent to jail

Fact
Personal

Against the Supreme Court's directive, Sahara has been unable to repay the sum of ₹36,000 crore. As a result, Mr. Subrata Roy, the Chariman and Founder of Sahara is in jail since Feb 2014.

Sahara using small savers to fund luxury resort

1 Feb 2016
Sahara using small savers to fund luxury resort
  • The Indian housing and infrastructure conglomerate Sahara, is using small savers fund to finance its luxury resort, Aamby Valley.
  • Around ₹1500 crores have been invested by the 2 cooperatives, Sahara Credit Cooperative Society Ltd and Saharayn E-Multipurpose Society Ltd, in the resort.
  • The 2 cooperatives could be severely hit if proceeds from Aamby valley are used for paying back investors from earlier finance schemes.

What is the Aamby Valley project?

Aamby Valley
What is the Aamby Valley project?
  • Aamby valley is projected by Sahara as the "first planned hill city" of independent India.
  • Spread across 10,000 acres, it is located in the Sahyadri mountain range, about 87 km from Pune.
  • According to Sahara, Aamby valley is valued at ₹1,00,000 crore; however, the Securities Exchange Board of India (SEBI) has valued it at only ₹40,500 crore.

The trouble with Aamby valley funding

New Crisis
The trouble with Aamby valley funding
  • According to a report published in Reuters, Sahara Credit Cooperative Society Ltd has shares worth ₹1039cr while Saharayn E-Multipurpose Society Ltd, has shares worth ₹4600crore.
  • However, Sahara may be "misusing provision of the laws" (on credit cooperatives) by investing into the resort project.
  • Notably, company is facing troubles in paying matured amount of even ₹30,000 and is convincing investors to reinvest in other schemes.