Most of our activity will be non-financial in 6 months: Subrata Roy

Interview with Sahara Group chief

Sahara group chief Subrata Roy talks to Samie Modak, Sachin Mampatta and Sneha Padiyath about the group’s shift to other sectors, probes from governmental agencies and how it is business as usual in Aamby Valley. Edited excerpts:

Why has the Sahara group landed in such trouble?
It started in 2005, when our residuary non-banking company (RNBC) was banned. When the Reserve Bank of India (RBI) banned our RNBC activity, they thought we would be smashed. But, with the grace of God, nothing happened. Then we went to the high court---it supported us. We went to the Supreme Court---it, too, supported us. The, then they had to withdraw their prohibitory order. After 1947, this was the first a prohibitory order to be withdrawn. So, it was taken as a personal defeat by the RBI brass---governors, deputy governors, etc. Then, all this started. One of the deputy governor was a director on the board of the Securities and Exchange Board of India (Sebi), when we submitted the offer document for our IPO (initial public offering). Then, all the problems started. I think it is worse than the Taliban now; I can only say this.

Did the IPO plans backfire?

No, they didn't backfire. Because that lady was sitting on the Sebi board, she got an opportunity for vengeance. That's why we had to react through newspapers, etc. We had no option. We have crores of people with us; we can't just keep mum on wrong allegations. We don't like it, but we have to. It has cascading effects, as other Sebi people started reacting on that. Now, it is a chain reaction. It is nothing but a vengeance policy.

There have been reports of a probe by the economic offences wing.
I have heard about it. Not only them; I have heard about other agencies, too. They have every right to do that. I am saying come to us and inspect; you would know the truth. Everyone is not checking; they're just making a media trial.

Has all this made business more difficult for your group?
Not so. But yes, if it rains, you will get wet. It comes and goes…that's not a problem. I must say when almost 110 million people are with us, what can happen? There has not been a single complaint yet, and there will not be.

You said the investor numbers you submitted to the Supreme Court are not accurate.
The numbers submitted to the Supreme Court were old. We had given these figures ourselves. These weren't not investigated or verified. We had given a figure of Rs 24,000 crore, or whatever it is. That figure has been taken by everybody. Why has today's figure not been taken by anybody?

It has been reported a lot of money has gone into Sahara Q Shops. Is this true?
Whenever a scheme is promoted by any agency or any company throughout the world, whenever there is a scheme that involves commission, at the time of maturity, agents try to persuade investors to reinvest. This happens everywhere, because that is their bread and butter. In our 34 years, we have seen the same thing happening. History says a good percentage is reinvested, a good percentage is taken away, a good percentage is partially invested---maybe they would take away the principal and invest the interest. This has been happening for 34 years. But now, nobody is willing to hear. Even after hearing, they are not ready to accept---that is the problem.

How much went gone into Q Shops?
Q Shops are purely non-financial. If money went into Q Shops, it didn't go from here. It went from small advances paid for various commodities. Before Sebi came, there was a scheme--- for Rs 12,500 every month, they would take vegetables from us…for which the advance is deducted…we give bonus points, too.

In places where Sebi has attached properties, how has your business been affected?
No, no, no, no! Attachment cannot take place. They can attach only the properties of those two companies (Sahara India Real Estate Corporation and Sahara Housing Investment Corporation).

So, is it business as usual?
Oh, yes!

Is it business as usual for Aamby Valley and other real estate projects?
Naturally.

What next for the group's business?
Now, we are more into non-financial activity. After six months, you will see the majority of our activity would be non-financial.

Any sector you would focus on?
We are going into hospitality, education, entertainment dairy and housing.