Sahara employees help to raise 300b rupee bail for Subrata Roy
Sahara group employees are helping to raise 300 billion rupees (HK$12.95 billion) in bail money to free the financial giant's chief Subrata Roy from prison, company officials say.
Roy, 65, was sent to New Delhi's Tihar jail on March 4 over a case involving the repayment of billions of dollars collected in an illegal investment scheme.
Earlier last week, the Supreme Court ordered Roy, who has a mansion modelled on the US White House, to post the bail.
In a statement, Sahara said the move to raise the money was "an emotional initiative".
But media reported that Sahara chiefs had sent e-mails calling for contributions, a claim denied by an executive.
Sahara raised 200 billion rupees from millions of small savers through an illegal bond scheme.
Regulators ordered the group to pay back the money with 15 per cent interest, even though the Supreme Court said there were "serious doubts about the existence" of the investors.
That fuelled long-running allegations the company may have been engaged in money-laundering for rich politicians.
Sahara insists the company has only been helping poor, mainly rural investors who are hard to locate.
The Supreme Court sent Roy to jail, saying it was "not happy" with Sahara's plans and demanded a "concrete proposal".
The bail money is being raised by a new Sahara unit. Donors will get shares in return.
Roy's entertainment-to-financial services conglomerate, based in Lucknow, claims to employ 1.2 million people, second only to India's railway.
Sahara's website says its assets total US$11 billion but Roy said his personal holdings were worth just US$1 million.
Regulators are tightening supervision of India's wide range of largely unregulated financing activities outside the traditional banking system.