Sahara India Financial Corporation : In the Dock ; the High-Profile Sahara Group Comes Under the Rbi's Lens. If the Sahara Group Does Lose in the Court Room, the Impact Would Doubtless Be Felt On Its Other Businesses, Including Real Estate, Media and Other Financial Services Like Mutual Funds and Insurance.

Business Today › July 03, 2008

Linked as:

Summary

He's the self-styled guardian of the world's largest family . That's how Subrata Roy, Chairman, Sahara Group, refers to himself (the guardian ) and his band of investors (a family estimated to be 42.5 million-strong) in a corporate presentation on the group. Last fortnight, however, the Rs 50,000-crore Sahara empire, for the first time, appeared to have begun crumbling at the core. The Reserve Bank of India (RBI) prohibited the group's cash cow, Sahara India Financial Corporation (SIFC), from taking fresh deposits for violating various norms. Sahara promptly got a stay from the Allahabad High Court, but the apex bank was quick to move the Supreme Court. On the day Business Today was going to press, the apex court had directed Sahara to appear before the RBI on June 12 and convince the central bank that its house was in order.

At the time of writing the ultimate outcome is still hazy, but insiders at the Sahara Group admit that if the RBI diktat prevails, Sahara could be in big trouble. None of the businesses except Sahara India Financial is making profits for the group and the funding of the group's other businesses is mainly through it, says a former employee of the Sahara Group who declined to be named.

See the full content of this document

Extract

Sahara India Financial Corporation : In the Dock ; the High-Profile Sahara Group Comes Under the Rbi's Lens. If the Sahara Group Does Lose in the Court Room, the Impact Would Doubtless Be Felt On Its Other Businesses, Including Real Estate, Media and Other Financial Services Like Mutual Funds and Insurance.

Spokespersons for the Sahara Group were either unavailable or declined to comment on the matter. An RBI statement o...

See the full content of this document