Sahara chief Subrata Roy arrested over 'illegal bond issuance'

(GETTY IMAGES)

A colourful business tycoon considered India’s largest private employer and who has interests around the world, has been arrested amid allegations that his companies raised up to £2.3bn in illegal bonds.

Subrata Roy, who owns London’s Grosvenor House hotel and the Plaza hotel in New York, was detained by police after he gave himself up in the city of Lucknow, in Uttar Pradesh. He did so following an order the previous day from India’s highest court.

Mr Roy’s Sahara Group is worth an estimated £6.6bn and has interests in everything from housing, manufacturing to aviation. He sponsors a Formula One team and the Indian national hockey team. He previously owned a cricket team in the Indian Premier League.

Two Sahara firms are accused of raising £2.3bn through bonds that were found to be illegal. The companies have claimed they paid the money back to investors but the market regulator, the Securities and Exchange Board of India, says they have not.

The arrest of Mr Roy came after he failed to appear in court in Delhi this week. He claimed he was attending to his ill mother.

Yet, a report in the Lucknow edition of the Times of India newspaper showed him attending a high-profile wedding at the time he claimed his mother was in desperate need of his attention. Her doctor’s report came from a hospital owned by Mr Roy’s group.

At a press conference in Delhi on Friday morning, Mr Roy’s son, Seemanto, said his father had failed to appear simply because he wanted to stay with his mother, whose health was still fragile.

“For the consumption of all those associated directly or indirectly, nationally and globally, with us, we wish to reiterate the fact that Sahara has always put our beloved nation ahead of any business interest and have always have ensured compliance to the law of the land,” said Mr Roy’s son.

He also issued a statement from his father. It read: “With folded hands and all humility, I ask the honourable judges to leave me under house arrest with my ailing mother till March 3.”

Mr Roy said he could not handle the “agony and humiliation” and accused the media of indulging in bullying. He added: “My office, my colleagues, my family members are continuously getting calls from media friends, relatives. They want to hear from me. All I want to say is: This is the best honour my country could give me”.”

Mr Roy, 65, is expected to remain in custody until March 4 as the Supreme Court refused to take up his bail petition on Friday, saying it was not urgent.