The Great Gambler of Borrowed Capital
Almost all the entrepreneurs are gamblers, but then most of them gamble with their blood, sweat and money. A thread about a Man who wanted to be the next Dhirubhai Ambani of India.

The Other Roy.
Peerless Group was established in 1932 by Radhashyam Roy (then a School Teacher)in Narayanganj, Bangladesh. Soon it diversified into a full-stack financing venture. By 1982, when it celebrated its golden jubilee, it had 400,000 agents and some 17 million customers.

Fearing its becoming too big to be managed, RBI tried to intervene and then we saw some of the biggest names from Bengal <Siddhartha Shankar Ray, Somnath Chatterjee, etc> to represent them against the ongoing case with RBI.

Supreme Court, in 1992, supported the RBI’s view that Peerless should find and invest their own working capital rather than use the deposits collected. And, then in 1996, RBI forced it to recast its board.

In 1998, Bimal Jalan started looking into other RNBCs, as thousands of investors had lost due to Chain Roop Bansali’s that went bust a year back. After 7 years they will shut down Ennoble India Savings. It was by Gali Janardhana Reddy, who will be later famous for many big things

Flashback 1978
A 30-year-old Subrata Roy (SR) set up Sahara in 1978 with a capital of 2,000, a peon and a clerk, and his father’s Lambretta scooter, in Gorakhpur. He will start a prize chit schemes, but that was banned in 1980 <as RBI was chasing Peerless>

In the next few decades, Gorakhpur which was known for Premchand, Gita Press, and their Criminal turned Politicians will become famous for SaharaShri. Sahara will soon shift their HQ to Lucknow, as Roy came closer to the CM of UP, Vir Bahadur Singh <who was also from Gorakhpur>

Vir Bahadur Singh, was a complex character who used to maintain a much better connection with the leader of Opposition Mulayam Singh Yadav than with his own party folks. Before that when he was on tour to Calcutta in 1985, he met a young congress member: Amar Singh.

All three played a HUGE role in the growth of Sahara. Later the rise of MSY along with AS was making many doors opened to SR. The rise of Dhirubhai had already given a template to many about how to mix business and politics.

The growth of the Sahara was going one way only. So much so that in 2002, while celebrating their silver jubilee they announced a 25% hike in the pay of all the employees.

It was going on well and It was all in tight control, all within the family, and his man Friday: OP Srivastava <who will also play a huge role in the rise of Baba Ramdev and Patanjali>.

While they were a big name in UP and Bihar, rest of India will take notice about them when in 1996 Sahara 'Friendship Cup' was held in Canada. SR, understood the power of Cricket, and will use it at a larger scale in the coming years.

Along with Cricket, SR loved attention such as: Guinness World Records. Like in 2013 he got two of that. When Sahara Q Shop, opened 315 Sahara Q shops across India and 121,653 of their employees gathered in Lucknow to sing the country's national anthem.

While RBI, and in between Income Tax tried nabbing them, but slowly and slowly Sahara was becoming Too big, esp with their political connections. SR wanted to remain in the limelight and then one day, he was puzzled why none of the Richest Indian lists featured him among them.

One of his close associates tried explaining to him that these lists are mainly computed based on the Market Capital of the companies. And, at that time they had Sahara Housingfina Corp and Sahara One Media as listed on BSE. Both of these were just OK-OK companies.

So, they decided to list Sahara Prime City and decided to enter Lion’s den. As SEBI started looking into the group companies: Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL).

The then SEBI head CB Bhave had put his foot down on clearing their draft. SR, hope was on the new head: UK Sinha. SIRECL and SHICL had garnered Rs 19,400 crore and Rs 6380 crore—collected the amount through OFCDs (housing bonds) between 13 March 2008 and 16 October 2009.

But HOW? SR was skipping RBI’s scrutiny by using the Registrar of Companies (RoC) gateway. At one time he had ~4,800 establishments, most registered with RoC Kanpur.
I am skipping the details of the SEBI-SR fight, you can watch the Netflix Bad billionaire.

But, let me share a detail from Tamal Bandyopadhyay book on Sahara, wherein he estimates that if the documents given to SEBI were laid out in a single line, it would have stretched to 6300 km.
SR kept on invoking Bharat Maa in his fight with SEBI and alleging that they were..

..continuously damaging its hard-earned and clean image by deliberately framing wrong orders. Interestingly, there has not been a single instance of an investor—in either of the two Sahara firms under watch—actually filing a police complaint or going to court, even till date.

Where was the wrong-doing?
When SEBI’s efforts of sending notices to lakhs of investors, a mere few came forward to claim their money. But then SEBI in their audit found a Kalawati figure in the 5,984 docs. And the names of her agent were named after places, like Haridwar.

Sahara never had many business models, and all their business was a big failure. Their para-banking (as they used to call it) was just a Ponzi Scheme backed by a strong network of people. These agents in the hope of 20-25% commission kept the engine going on and on.

When there was pressure by SEBI, most of the investors were asked to sign a few documents. Sahara was giving them <I was one of those who signed such document, without reading much in 2011> a new bond of their new retail venture <Sahara Q>.

Make Money Your God And It Will Plague You Like the Devil.
Aftermath: the Supreme Court also ordered for a CBI probe into the massive funds collected by Saradha Chit Fund and other such companies in West Bengal, Orissa and Assam. This later opened another pandora box.

That's all. "Life eventually boils down to a choice- you either stand by your principles and responsibility, or you don't."
SR can still claim to be innocent, while his innocent customer got duped.