SUBRATA Roy is a crook. A gangster, a mafia man, part of the D-company. A tax evader, a scamster who runs away with poor peoples' hard earned money. Dare cross his path, and you could end up with a hole in your head. Subrata Roy is a hard working, brilliant and fearless entrepreneur. He is an honest, caring leader who shares most of his profits with his employees. He'll always be there for you in times of trouble; he is elder brother, father, god.
Subrata Roy is the country's most bizarre business baron. Simply consider the designation of the founder and boss of the extremely high-profile yet supremely secretive Sahara Group: managing worker and chief guardian. His company doesn't have headquarters, it has a command office. His employees are supposed to greet one another only one way: right hand placed on heart, and a "Jai Sahara." Who is this man?
The real Roy (born Subrata Roy; plain Subrata on his visiting card; Subrata Roy Sahara in his official correspondence) is all, or some, or possibly none of the following: A financial wizard who started off 18 years ago with Rs 2,000 in UP small town Gorakhpur, and has built up group assets worth Rs 5,000 crore. A hoodlum who tried to rig the Lucknow seat for Raj Babbar in last year's Lok Sabha elections. A socialist who distributes 45 per cent of his pre-tax profits among his employees. An industrialist whose core business is laundering money for top politicians, even the underworld. A management guru, featured on the BBC, whose business style is currently under the microscope of three research fellows from Japan. A star-struck small-town boy who organises star nights and even dances at these shows. An author, who in his book, Shanti, Sukh, Santushti (for excerpts, see Subrataspeak) , attempts to inspire people to stand up for what is right, to tell them that man does all he does for himself alone, to prove that discipline, honesty and hard work are the foundations of a strong character. A crooked businessman under investigation for years now for tax evasion.
Whatever the truth about Roy—if there can be one—what is undeniable is that this man thinks totally uniquely. He sees himself as the karta (head) of a 5.5-lakh strong family of 2.8 lakh totally dependent workers (what we call employees) and an equal number of partly dependent workers (part-timers). A guru whose management philosophy of the emotive man—however outrageous to those following conventional administration and business norms—aims to harness the emotions of that family to drive the corporation to success.
And for Sahara, success has been spectacular. While the group has its interests in many areas—pharmaceuticals, hotels, construction, airlines, textiles, printing, publishing, advertising, marketing and consumer products (fans and geysers), the mainstay was, is, and in all probability will continue to remain finance—principally the euphemism he invented: parabanking. Assets have grown 2.5 crore times over the last 18 years.
Just one little catch: it's all hearsay. Despite repeated attempts by Outlook , Sahara refused to divulge financial details. No balance sheets, no annual reports, no supporting figures.
This stubborn refusal to part with even the basic information is irking the Revenue department as well. According to the department, the group has "attempted to thwart inquiry and investigation by continually non-cooperating with IT authorities." Non-cooperation, however, is only the little tip of the titanic charges being levelled against the group. Other than the holding firm, Sahara India, the department sees the group companies as a "facade" and a "corporate veil". In fact, the department dismisses the whole business as one mammoth money-laundering operation (see box ). The charges are serious enough to make any businessman run for cover.
Not Roy. When the department alleged that Sahara was whitewashing money for top politicians, he replied with full page advertisements in leading dailies denying the charge and accusing IT officials of harassment. Says he: "In my personal, professional, social life, if there is one person who can say that I have done anything against basic values, ethics, laws, not fulfilled any commitment, or exploited anybody's helplessness, I will leave my chair and go to the jungle." He looks you straight in the eye when he says that.
YOU begin to sense a motherlode of pure obsession deep inside the man, and he agrees. As a rebellious youngster, he wanted a mobike. His mother was against it, but he finally got his father to buy him a second-hand, dilapidated Jawa, that would turn comatose at the slightest pretext. Others would have sacked it off, but the stubborn Subrata mastered it, by learning every little thing about the machine's innards. Today, he scoffs at '90s Hell's Angel wannabes: "They don't even know how to change a spark plug!" That obstinacy, perseverance and an amazing eye for detail pervades his business activities. When he gets a business idea, he won't rest till he's figured out ways round every government policy which apparently forbids him from executing it. Take the 5,000 acres he plans to develop in Maharashtra hill station Lonavala. Due to the constraints of the Land Ceiling Act, he loaned money to employees, who bought the land, and gave all rights and powers of attorney back to Sahara. Leaving the IT department gnashing its teeth.
Couple that cunning now with his homegrown business theories. Roy isn't looking for managers, he wants men. "Emotions," says he, "are the key to corporate success." All talk about dissociating emotions from the workplace is hogwash. There are three kinds of insecurities that drive men: physical, financial and emotional. Conventional businesses tell employees to leave their emotions back home. This, says Subrata, is wrong, as you then get an incomplete man on the rolls. He believes that instead of breaking the emotional cord that binds the man to his family, the organisation should give the man a chance to become a part of a larger, corporate family. A family where all his emotional needs and insecurities are taken care of.
These, says an associate, are not mere words. Thus, there is no concept of a few owner-employers supervising employees. From the top, down to the last man, all 2.8 lakh workers are part of the Sahara family. There are no trade unions. Working from more than 1,200 branches, Sahara's could well be the country's largest infrastructure in the private sector. Outside his room, a fellow worker comes up to him with folded hands and touches his feet. "Be happy," blesses Subrata, a hand on his head. When the complete energies of people are unleashed, he says, "you have to grow."
He points to this growth as the reason for being hounded by the authorities (see interview ). He tells you about a conversation with an IT chief who admitted that when he couldn't meet his revenue targets, he went after Sahara. But when it came to removing the charges, the chief said, "No, that I can't do. I have to collect revenue." The other bete noire, perhaps predictably, is the media. He feels the fourth estate is fast becoming the bane of Indian society and a principal cause of the despair that haunts it. "Our troubles started when we got into publishing." Sahara publishes a Hindi newspaper, Rashtriya Sahara . According to Roy, for the first time in Hindi journalism, readers were being given a quality product, the journalists were well paid. This hit the existing Hindi papers hard; and they began a campaign against Sahara. But in the end, they had to double their pages from eight to 16, bring in colour pages, increase pay scales, and basically follow Sahara, he says. The campaign didn't end, though.
Roy claims the Hindi press has systematically spread calumnies against him—rigging for Babbar, proximity to Mulayam Singh Yadav and his Samajwadi Party. So, apart from fight-ing 50-odd court cases slapped on it, a defiant Sahara intends to sue these these periodicals: "It is all bullshit! Now we are dragging them to court." Meanwhile, Sahara has gone far beyond what management pundits would call the critical mass. Subrata, while waving away all ideas of quantity and giving the quality spiel, is indeed looking at that mass. On the anvil is what he claims will be the largest consumer products business India has ever seen.
But then, his scale of operations is never less than gigantic. He even delivers. In housing, for instance, group company Sahara India Housing is developing 6,000 acres, probably one of the largest such projects in the country. With residential and commercial complexes in mini and mega townships across 14 cities, the company is implementing projects worth Rs 7,000 crore. It also plans to build houses for the common man: 40,000 budget houses at under Rs 1 lakh.
Likewise, in its printing business, Sahara claims to have one of the largest print production facilities. In publishing, the company says
Rashtriya Sahara is the largest circulated Hindi daily launched post-1947 by a new group. This venture, however, is not for profit; it is "our emotional objective". Sahara Airlines, says chief controller U.K. Bose, has just about broken even. In cricket sponsorship, the man has gone international: the Sahara Cup is held in Toronto.
Expenses, the group claims, are under control—establishment and promotional costs are just 3.8 per cent—and the average payable interest rate on deposits within eight per cent. This makes the group's total cost of funds just 11.8 per cent, a feat hardly any Indian fin-ance company will be able to match. Due to lower emotional energy?
So Roy would believe. A company that has four owners and 400 employees, and operating in the conventional way, tots up sales of Rs 1 crore and a profit of Rs 10 lakh, would earn each partner Rs 2.5 lakh. On the other hand, if the same 404 people get together and work as a family, "I can challenge that the sales will be Rs 10 crore." Even at half the margin, the profit will be Rs 50 lakh. Of this, as per the Subrata model, if you distribute Rs 25 lakh to workers, each partner makes Rs 6. 25 lakh. "Which is a better option?" So who's Subrata Roy? Tinker, tailor, soldier, sailor? Or rich man, poor man, beggarman, thief?