Sahara India Pariwar's Subrata Roy surrenders over repayment of loans

PUBLISHED : Friday, 28 February, 2014, 4:01pm
UPDATED : Saturday, 01 March, 2014, 1:47am

Subrata Roy, owner of the financial services group Sahara India Pariwar, surrendered to police after India's top court issued a warrant in a probe into over whether he failed to refund 240 billion rupees (HK$30 billion) to his depositors.

Roy, 65, was co-operating with the court's directive, his son Seemanto Roy said in New Delhi yesterday. The financier defied a summons and failed to appear in court on Wednesday, prompting a non-bailable arrest warrant. In a statement issued yesterday, Roy cited the need to be at his ailing mother's bedside.

Roy, who began operations in 1978 by going door to door to collect small cash deposits, is seeking to convince the top court that Sahara has complied with an order to refund the loans to 30 million depositors.

In June 2011, India's market regulator alleged two of his companies sold convertible debt without approval.

The financier, who calls himself "Sahara Sri", is part of the US$670 billion shadow banking industry in Asia's third-largest economy. Roy earlier dismissed reports in newspapers that he was evading arrest after police, seeking to serve the warrant, could not find him at his house. "I am not that human being who will abscond," Roy said yesterday in a media statement, explaining he had left his house in Lucknow to consult doctors on his mother's medical reports when the police were looking for him. "I've started hating myself. Now, I can't handle this level of agony and humiliation. They are bullying and indulging in character assassination."

Sahara says the 31,675 cartons of documents in 128 trucks it had sent to the Securities and Exchange Board of India proved it had repaid the money. Lawyers for the market watchdog have told the court the paperwork was muddled and the paper trails often led nowhere.

In his statement, Roy said he had sought house arrest until Monday, which is the next hearing date.

Over the past 35 years, Roy has built an empire that at the end of 2012 was valued at US$11 billion by collecting amounts as small as 32 US cents from rickshaw pullers and laundry washers.