How hapless investors made investment safer

Regulatory reforms in favour of investor safety were spurred by the plight of retail investors left in the lurch by Ponzi-like schemes run by Sahara Group under Subrata Roy 1948-2023)

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Swashbuckling, buccaneering and flamboyant, Subrata Roy, founder of the Sahara Group that bestrode the Indian business and financial sector like a colossus in the 1980s, has been described as all that and more. Robin Hood to some, he was a dream merchant to thousands more who lost their hard-earned money in his companies. Among financial-sector regulators, his name evoked exasperation, as he had defied attempts to rein him in for years. Back when Sahara burst onto the scene, India’s economy had not yet been unshackled. Like another Indian, Harshad Mehta, who exploited the grey areas in our maze of regulations, Roy managed to create a vast financial empire by walking the thin line between what was permissible and what was left vague and undefined. The lone financial-sector regulator of the pre-reform period, the Reserve Bank of India RBI) watched almost helplessly as the residuary non-bank finance company the term then used for the main engine of the group, Sahara India and Financial Corp) went on to garner deposits from ignorant savers