Diverse businesses in losses, future of flagship in doubt

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 group’s 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.

In Saharashri’s absence, son Seemanto may take charge

With Sahara Group founder and chairman Subrata Roy sent into judicial custody till March 4, 2014, it is for the first time that the group will not have its chairperson to lead the business operations and, in all likelihood, his younger son, Seemanto Roy, may take over the mantle of running the affairs of the group for the time being.

While the leadership page of the group website only depicts Subrata Roy, in the board hierarchy, the group has put the names of Swapna Roy (wife of Subrata Roy) and OP Srivastava , the founding partner in that order.

However, a source who has worked closely with the top management said, “Seemanto Roy, the younger son of Subrata Roy, looks closely into the affairs of the company along with the chairman. Seemanto is more involved in business affairs and is hands-on.”

Seemanto fielded questions from reporters in New Delhi on Friday, minutes before Subrata Roy was arrested by the Uttar Pradesh Police in Lucknow. When asked about the succession planning within the group, one of the group spokespersons declined to comment.

With 123 companies within the group as on March 2009 (as per details submitted to Sebi), the number of group promoters stood at a massive 37.

The promoter group includes Subrata Roy’s own family, wife Swapna, sons Sushanto and Seemanto, founding partner Srivastava and the parents and Roy’s brother-in-law, Joy Broto Roy.

In most of the group companies, Roy is the major shareholder followed by his wife and OP Srivastava. However, in the past, his younger son Seemanto Roy has been more involved in business affairs.