Indian guru's death sparks a scramble over his £5bn empire

The death of a self-proclaimed holy man from southern India has thrown millions of his supporters around the world into mourning and set off speculation as to who will inherit the leadership of his network, said to be worth at least £5bn.

Thousands of police had been standing by in the state of Andhra Pradesh as the health of the Hindu guru Sathya Sai Baba gradually got worse, after he was hospitalised a month ago and needed breathing support and dialysis.

Two days ago doctors announced he was suffering from multiple organ failure and had stopped responding to treatment. After the 86-year-old's death was announced yesterday morning at his ashram in Puttaparthi village, people started pouring into the temple complex.

Officials announced that the guru's body would remain in the temple until Tuesday and that a funeral, reportedly with state honours, would be held the following day. After news of his death emerged, India's prime minister, Manmohan Singh said in a statement: "Satya Sai Baba was a spiritual leader who inspired millions to lead a moral and meaningful life, even as they followed the religion of their choice. His death is an irreparable loss to all, and the nation deeply mourns his passing away."

The saffron-robed guru had a vast following and his movement established ashrams in more than 126 countries. His supporters included high-ranking politicians, movie stars, industrialists and athletes. Among his biggest supporters was Isaac Tigrett, the co-founder of the Hard Rock Cafe chain, who sold his stake for more than $100m (£61.3m) and donated millions to Sai Baba to set up a special hospital in Puttaparthi to help the rural poor.

The guru used to tell those who gathered to hear him speak: "I am God. You too are God. The only difference between you and me is that while I am aware of it, you are completely unaware."

Yet for all his followers, Sai Baba was an often controversial figure who was condemned by some as a fake and whose purported miracles, when he would apparently pull magic ash from his hair, were denounced as conjuring tricks. The man who never married and had no children, was also accused of sexually abusing some of his followers, though he claimed these allegations were propaganda designed to undermine him.

A key issue will now be who succeeds Sai Baba as head of an organisation with its global network of religious centres. A recent report in India's Open magazine suggested no successor had been decided by the guru. "Sathya Sai Baba has not named a successor," said a state politician. "His is a strange case of a living god. Sai Baba's powers cannot be passed on, only his legacy can."

The report said that a nephew, 39-year-old RJ Ratnakar Raju, is one of the trustees of the Sathya Sai Central Trust. While the nephew could stake his claim, most trustees are said to back a former government official called Chakravarthi, who became a follower of the guru more than 25 years ago and held a senior position at the trust's university. A statement issued by the trust after Sai Baba was admitted to hospital, said: "There is or will be no vacuum."

The guru was born in November 1926 and given the name Sathyanarayana Raju. As a child, he was said to display a tendency toward spirituality and unusual intelligence, which he expressed through music, dance and the arts. At the age of 14, he declared himself a reincarnation of another Hindu holy man called the Sai Baba of Shirdi, a town in western Maharashtra state, who had died 20 years earlier. As he quickly started to attract followers, his village was transformed from a sleepy backwater into a vibrant town with an ashram, a large hospital, a university and schools run by his trust.

He had suffered various health complaints over the years and concerns had forced him to cut back on his public appearances. He survived a stroke and a series of heart attacks in 1963. In 2005, he began using a wheelchair, and a year later he fractured his hip when a student fell on top of him.

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