SAHARA INDIA PARIWAR is an Indian conglomerate founded by Mr. Subrata Roy. The business interests of the organization are in finance, construction, mass media, retailing and IT services and outsourcing. The net revenue generation is US$ 11 billion and the market capitalisation is around US$ 25.94 billion. The group operates around 4799 establishments with over 11 lakh salaried employees and field workers.
The group boasts about being the World’s Largest Family and its core values are derived from earnest patriotism towards our Bharat Maa (mother). The philosophy of the organisation is that of ‘Collective Materialism’ which aims at continuous collective growth for collective sharing and caring. Even after having such a huge workforce, SAHARA never felt the need of having a Trade Union.
In 2012, the news magazine India Today named Roy among the 10 most influential businessmen in India. In 2004, Sahara India was termed by Time magazine as “the second largest employer in India” after Indian Railways.
The smooth, quick and glorious journey of Sahara India received a jerk and got to a halt for a while when they got into a legal battle with SEBI (Securities and Exchange Board of India). The battle still continues in the Supreme Court of India but has surely passed its worst phase. From November 2010 to present Sahara India has been tangled in the process of the battle where they are fighting against the accusation from the Supreme Court and SEBI of raising money from the public in deemed illegal ways. The court has ordered Sahara India Real Estate Corporation Ltd.(SIRECL) and the Sahara Housing Investment Corporation Ltd.(SHICL) to refund dues to its public investors, the amount of which has gone up to Rs 24,000 crore with the accretion of interest.
The organisation has not just faced accusations and imposition of dues but severe bans and punishments from the law. On February 2014, Subrata Roy was arrested by Uttar Pradesh police for failing to appear before the Supreme Court. Later in March 2014, Subrata Roy along with two other directors were sent to Tihar Jail. SEBI cancelled Sahara’s mutual fund business license in July 2015. After being in Tihar Jail for more than two years Subrata Roy was released on parole in May 2016 to attend the last rites of his deceased mother.
The changes that the organisation faced in the run of the whole timeline of events were drastic and unplanned because everything happened in a quick time and with a lot of restrictions on the company from the government. The pressure for change were a combined result of
• Ethical and Moral Reasons
• Shifting Political Dynamics
• Changes in Societal Values
• Changes in the Government Regulations
Impact of the Change
Due to imposition of bans on use of funds and many financial flow lockdowns and freeze on bank accounts, Sahara India faced a great amount “liquidity crunch”. The Supreme Court’s orders and SEBI’s interventions created a lot of problems in meeting the financial obligations .
Very harsh and severe decisions were taken such as holding salaries of the employees as their was no money to give. Over 9 lakh employees were getting only 40-50% of their respective salaries.
The employees expressed anguish against the company leadership by protesting on the roads by stripping their clothes and holding a begging bowl. They were of the opinion that the management was not considerate of its employees who have put their entire life in the company.
Many high authority and senior position employees were given an option of ‘safe exit’ which gave them their immediate balance salary on account of resigning. Many resigned taking this offer but weren’t paid as promised by the company.
The Corporate Communication of the company expressed helplessness about the impending protests and told that the whole administration is suffering under the embargo of SEBI and Honourable Supreme Court. They weren’t able to raise even a rupee by selling/mortgaging any asset of the group. 33-50% salaries were offered from somewhere so that employees can pull on their families.
Sahara India’s future was facing great uncertainty and workers were frustrated over the lack of information about the group’s future. The offices had barely any work to do and months went past before salaries were paid to a certain section of employees.
The situation worsened and also as reported led to the suicide attempts of a few poor employees who weren’t able to bear the financial load. In November 2015, Subrata Roy released a letter to staff from Tihar jail expressing that company’s fortunes will change in a few months and whatever the dues employees have to bear in the turmoil will be paid back.
“After 37 years of trust, I am asking you for just four months—December, January, February, March. Please keep your faith and love in us.”
In order to arrange for the $7 billion bail amount, the company went into many talks of selling assets like New York’s Plaza Hotel, Grosvenor House in London and Amby Valley outside Pune. Talks with US-based Mirach Capital Group to raise $2 billion also collapsed after it was reported that a bank letter underpinning the proposed deal was forged.
Addressing the Issue
Immediately after his release from Tihar Jail in May 2016, Sahara India head Subrata Roy planned for a nationwide tour to install confidence among his beleaguered employees and investors and motivating them to get back to work. His immediate priority is to push employees to seek investments from people in cooperative society.
He visited cities like Delhi, Patna, Hyderabad, Bhubaneswar, Kolkata to address employees and was welcomed very fondly. The meetings were very secretive where entry was granted through specially coded cards and mobile phones were locked by jammers during the conversations.
The communication that Roy put forward was a really straight forward one where he told the workers not to hope for any miracle as the road ahead was tough and full of challenges.
“Your company, which took care of you for so many years, is going through trouble. Work hard to regain lost glory,” said Roy.
There were many employees who stayed away from these meetings on account of loss of trust. They told that they will be a part of any interaction only when their salaries are paid.
The DADA ( Denial, Anger, Depression and Acceptance) syndrome is more than apparent in the given situation.
Given the timeline of 2 to 2.5 years of the issue, employees have gone through a lot of trauma and hardship. In such a large workplace the mental levels of different employees are different and its difficult to maintain the oneness of the organisation. Few employees in the early stage couldn’t accept what was happening and couldn’t make sense of why that was happening. Then came the protests and anger of the frustrated workers. Few suicide attempts clearly showed the Depression levels.
In a few last months after SaharaShri Ji came out HOPE started building and with help of the senior mentorship the employees started accepting things.
Since past 6-7 months everybody in the company is receiving full salary and the due salaries of previous months will be given along with interests, as assured by Subrata Roy.
Sahara through sale of properties and cash submissions has payed back around Rs 12,000 and submitted a money repayment plan of two and a half years to give the rest of the amount asked by the court. Subrata Roy is of full confidence that he will restore the company to it’s early days.
Qualitative Research Telephonic In-depth Interview
Mr. Amar Singh, Sahara India, Head of Media, Print & Electronic, Kanpur Unit
According to Mr. Singh, Subrata Roy is the Vivekananda of the modern world. He is as an individual very caring for the employees of his company and in the organisation, the most important element for him is its workers. Mr. Singh met Subrata Roy four times when he was in Tihar Jail and says he was amazed by the dedication and calmness he had in his mind about the organization and its workers.
What were the problems faced by the organisation when Subrata Roy was in Jail ?
Though the SEBI intervened in 2010. Problems were apparent only in 2014 when Subrata Roy went to jail. Before that Roy was the saviour who always came to rescue when the company faced any hiccups. He is the mentor of the 11 lakh people family and when he went to jail everything got disengaged and disorganised. There were non-payments of salaries and a few employees leaving out the organisation.
Why were the problems so severe ?
The mother sector of the company is the finance sector and SEBIs intervention caused great cash inflow problems. No company has so much cash on hands and money is invested in properties. Since the court and SEBI didn’t gave chance to sell property there was a large liquidity crunch leading to fall in expenditure and low payment of salaries.
How many employees left ?
1500-2000 people left, but everyone is ready to get back to the company now since the situation is restored. The employees who weren’t emotionally attached to the company’s vision and mission decided to leave the company.
What were the measures applied to get away with those problems?
The main issue is that people of the organization should be paid salary. Since, Subrata Roy has been released from jail he has ensured that every employee starts getting their regular salary and that is what matters to the employees. Nobody asks the question, that where is the money coming from?
How the situation has changed since he is back from Jail ?
Since past 7-8 months people are getting regular salary. People have gone back to their work in a serious manner. Things are really improving after much tense environment.
What is the current scenario ?
Sahara Hospital is earning well. Sahara hotels like Amby Valley near Pune and Sahara Star in Mumbai is doing good and regular business. Sahara’s para-banking sector is doing fine in other schemes apart from the banned one’s by SEBI.
How are things looking in the near future ?
Sahara is a company which is full heartedly dedicated to the welfare of its employees. It was SaharaShri Ji’s dream that even the peon of his company should come to office by a car. Senior peons are given salaries of around Rs 30,000.
Investment from public is continuing at regular rates. Some payments are getting delayed but its payed back with interests. Advertisements in media haven’t gotten down but the image in market has been hampered somewhat, which will be restored in some time.
Sahara India has received hardships and has come out of it. Hopefully, it will comply with the orders of paying Rs 24,000 crore to the court and resume business as a successful conglomerate. In the deep research (secondary and primary) what is certain is that Sahara India is a very concerned organisation as far as the welfare of its employees is concerned.
After coming out of Jail Subrata Roy has made plans of diversification of business apart from para-banking like FMCG, diary sectors. 12,000 crore has been payed back and two and a half year plan of repayment is also submitted. Hope the issue will resolve soon in the Supreme Court.
As on 28th November, 2016 a new order from Supreme Court has given parole to Subrata Roy till 6th February, 2017 on condition of payment of 600 crore for security and assurance that he will comply with future processes of repayment.
Sahara Pranaam !