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
- 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
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
- 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 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
- 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.