Subrata Roy, the owner of Indian business conglomerate, Sahara group (BOM:503691), was arrested in the northern Indian city of Lucknow Friday, after the Supreme Court issued a non-bailable warrant against him for failing to appear for a court hearing about his involvement in a multi-billion dollar scam, local news reports said.
The group, which operates hotels (BOM:511533), including the Plaza Hotel in New York and London's Grosvenor House, and is the official sponsor of the Indian national field hockey team, has been under the scanner for raising 240 billion rupees ($3.9 billion) in bonds through two group companies in a transaction that has been ruled illegal. And though the group has repeatedly claimed that it has returned most of the investors' money, the Securities and Exchange Board of India, India's market regulator, has rejected this claim.
"Mr. Roy willfully submitted himself before Lucknow police. He is co-operating with all authorities," Seemanto Roy, his son, reportedly told a press conference in Delhi.
The police searched his house after the Supreme Court issued the warrant Wednesday. On Friday, Subrata Roy surrendered to the police and released a statement saying that he was unable to attend the court hearing because he is caring for his sick mother and that he will “unconditionally follow” the orders of the apex court.
The 65-year-old Roy will remain in custody until Mar. 4 as the Supreme Court refused to consider his bail petition Friday. According to Reuters, other executives of Sahara attended the court hearing Wednesday and Roy's lawyers had appealed to the Supreme Court to call off the arrest order.
The Lucknow-based Sahara group is reportedly worth 682 billion rupees ($11 billion) and owns a stake in Force India, a local Formula One racing team while Roy, who is a household name in India for his meteoric rise to fame, is frequently seen interacting with sports and Bollywood celebrities.