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Subrata Roy: Indian owner of Grosvenor House hotel accused of £2.3bn illegal bond scam

Tycoon gave himself up to police amid allegations that his companies raised up to £2.3bn in illegal bonds

Back in 2010, the Indian tycoon Subrata Roy threw a party to celebrate India’s hosting of the Commonwealth Games.

There was a bounty of food, copious amounts of drink and a Bollywood orchestra of more than two dozen musicians which Mr Roy had flown in from Mumbai and which rocked all night.

At the end of the hot and sweaty evening, Mr Roy, seated in an air-conditioned room, got up to hug his guests. “Thanks for coming,” he said, revealing to a British guest – off the record – of his plan to buy London’s Grosvenor House hotel.

Three-and-a-half years later, Mr Roy faces the prospect of spending the next few nights not in either the Grosvenor House, which he bought a few months after the 2010 party for £470m, or the Plaza hotel in New York, in which he bought a 75 per cent share in 2012 for £343 million.

Rather, the 65-year-old Mr Roy today woke up in a police cell in the city of Lucknow after giving himself up to police and being arrested.

The colourful tycoon, said to be India’s largest private employer, gave himself up amid allegations that his companies raised up to £2.3bn in illegal bonds. Mr Roy surrendered to police in the state capital of Uttar Pradesh on Friday morning 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 squad 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 earlier this week. He claimed, through his lawyers, that 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. It said it did not consider the matter to be urgent. Mr Roy might see things differently.