Sahara in Macedonia: Unfinished plans of the controversial businessman
While being under investigation for financial fraud in India, the owner of the company
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Authors: Xhelal Neziri, Zaklina Hadzi-zafirova, Aleksandar Bozhinovski
Subrata Roy, 66-year-old controversial businessman from India, came to Macedonia in June 2012 with a wide smile and full of optimism, as an actor of Bollywood films. Dressed in a white shirt with short sleeves and a black jelick, modern version of the traditional Indian clothing, in Macedonia he was introduced as the savior of domestic economy.
He met most of the ministers, the mayor of Ohrid and Prime Minister Nikola Gruevski. His plans, which were released after the meetings, predicted construction of a tourist resort in Ohrid, a fodder factory and a dairy farm with 20 thousand head of cattle. With these and other announced investments employment was expected of over 3 thousand unemployed people in Macedonia. It was estimated that this would mean greater success for a country with about 30 percent unemployment.
As a gift, Roy announced construction of the monument of Mother Teresa in Skopje square.
“When I first heard about Macedonia I knew that Mother Teresa was born here. I often spent time with”, said Roy in an interview for a local Macedonian TV station.
Then he talked about the first meeting with the Macedonian Prime Minister Gruevski and Minister of Finance Zoran Stavrevski.
“Your Prime Minister and Minister of Finance came to India. We met in Delhi. They seemed wonderful human beings to me. Then I came here, in Ohrid. I have met some people here, I concluded they were so innocent, good, fine human beings. I told my people to make a film about this country. Then we will attract shootings here from Bollywood and Hollywood. Believe me that only with great movies a country appears in the world map”, said Roy.
All his adventure in Macedonia was happening at a time when in his home country India the space for business was narrowing for him.
Following the decision of the Supreme Court of India, adopted in August 2012, his companies “Sahara” were supposed to return about 5 billion US dollars to millions of investors who had been defrauded in the construction business.
Solid indications of corruption
This scandal began in 2010, when one of the accountants of “Sahara” Roshan Lai sent a letter to the Securities and Exchange Board of India (SEBI) to investigate the issuance of securities in construction by Roy’s companies.
After four years of investigation, in February 2014 Roy was arrested by the Indian authorities. He is allowed to communicate from prison in order to sell his property inside and outside India, and to collect the necessary money to compensate the investors.
Macedonian Government defended itself by activating the bank guarantee of 3 million Euros, which “Sahara” had submitted as a guarantee for the fulfillment of obligations for investment in the plant Dzumajlija.
But the real motive of Roy’s investment plans of Macedonia remains unclear precisely at a time when he was under investigation in his country!
“The reasons for entering such deals must be more cost-effective than what can be lost. It is already a very strong indication of the existence of some interest other than public interest and it is a very strong indication of corruption”, said the president of Transparency International in Macedonia, Sladjana Taseva.
Anticorruption expert Sasho Ordanovski suspects that a corruption affair might be hidden behind Roy’s case. He says that ever since the first arrival of Roy in the country it was clear that the whole story sounded too good to be true.
“But its denouement with the total investment debacle of the Indian and his imprisonment in his native country might just save the high officials of VMRO-DPMNE not to penetrate deeper into the treacherous waters of the financial and other types of serious crime in this case”, adds Ordanovski .
All Sahara companies in Macedonia
Based on these suspicions, Center for Investigative Journalism SCOOP-Macedonia came to documents which show all companies of Roy and his close people in the country, as well as their financial statements.
People of “Sahara” in Macedonia have registered a total of four companies.
First registered company is the Company for construction and services Sahara Global Com Ltd Skopje, which dates back to August 16, 2012, two months after Roy’s first visit to Macedonia. Subrata Roy Sahara himself is the founder, along with his second son – 37-year-old Seemanto Roy. Total basic capital is only 5 thousand Euros, of which 2,600 are registered on behalf of Subrata while the remaining 2,400 on behalf of Seemanto.
The second company was registered on August 24, 2012, and the founder is Subrata’s first son – 39-year-old Sushanto Roy. In the Central Register of Macedonia the company is registered under the name Company for processing agricultural products Sahara Pure Eatables Corporation Limited Skopje. Basic capital is 5 thousand Euros while for Sushanto’s address it states that he is a citizen of the Republic of Macedonia. Using the legal right to grant citizenship to foreign investors who will invest more than 400 thousand Euros, Sushanto and his wife Swapna now have Macedonian passports.
According to the submitted financial report, total assets of the company in 2013 were 9.1 million Euros. About 3.6 million Euros were fixed assets, about 5.5 million were current assets, about 4 million were capital and reserves, while about 5 million Euros are reported as short-term and long-term liabilities.
Total revenues for 2013 are estimated at 2.3 million Euros, while the profit for the business year is about 200 thousand Euros. The average net salary in this company amounted to 14.802 denars.
The third company was registered on December 14, 2012, Company for construction, services and development Sahara Global Ltd Skopje. Founder is the foreign firm Aamby Valley (UK) Limited, based in London, England. In the official documents of the United Kingdom directors of this powerful company are Subrata himself, with his two sons – Seemanto and Sushanto, his brother Swapna and the person Om Srivastava, all from India. They all became directors in July 9, 2012.
According to the financial report of this company which has 9 employees, in 2012 there was almost no turnover. But during 2013 520.8 million Euros are listed as income, of which 459.8 million Euros are costs and the total profit was 75.4 million Euros.
Over 1 billion Euros are listed as total funds available to the company, about 335 million are fixed assets, about 687 million are current assets, about 361 million are capital and reserves while about 650 million are listed under the heading “long-term and short-term liabilities”. In 2013, the average net salary in the company amounted to 13.939 denars.
The fourth company is the Company for trade Marine Hospitality Ltd Skopje, also founded by the London company Aamby Valley (UK) Limited.
In the financial report submitted to the Macedonian institutions it is reported that in 2013 the company had about 245 thousand Euros. About 155 are fixed assets, about 90 thousand are current assets, about 82 thousand Euros are capital and reserves while short-term and long-term liabilities are about 163 thousand Euros.
The company realized total revenue in the amount of 150 thousand Euros, with realized profit of about 34 thousand Euros. According to the documents, the average net salary paid by this company was 9.045 denars.
According to the documents, only the first registered company Sahara Global Com Ltd Skopje has not submitted balance sheet and income statement for 2013. “The entity has not submitted annual accounts or a notification that there was no business for 2013”, it is written in the document of the Register for annual accounts of CRM. On November 30, 2013 a procedure for liquidation of the company was approved, but its business during the year-long operation in Macedonia remains unknown.
The mysterious company
Only the first registered company Sahara Global Com Ltd Skopje has not submitted balance sheet and income statement for 2013. “The entity has not submitted annual accounts or a notification that there was no business for 2013”, it is written in the document of the Register for annual accounts of CRM. On November 30, 2013 a procedure for liquidation of the company was approved, but its business during the year-long operation in Macedonia remains unknown.
No studies on Roy’s projects
Anticorruption experts Taseva and Ordanovski think that Roy’s adventure will long be remembered in Macedonia.
“Mr. Roy will be remembered in the annals of the Macedonian country long after the departure of Gruevski and Stavrevski and he should teach us from politicians to expect realistic and achievable projects, not to distract us with some clowns and investment models that the government serves to us due to the desperate need not to talk about the real situation in the country”, he says.
On the other hand, says Ordanovski, it is advisable to wait and see what and who will emerge from the hectares of nationalized land by Lake Ohrid and the unplowed fields in Sveti Nikole. “And then we can talk about real corruption behind the case with Mr. Roy”, he emphasizes.
Taseva criticizes that for none of the announced Roy’s projects there is a study on the need for such a project, how it will affect the lives of citizens, the legality of the proceedings, as well as the credibility of the investor.
“The lack of these indicators is a strong indicator that something is wrong with these projects. There was information that “purchased” facilities, including the dispute with MOC, had been forcibly confiscated”, says Taseva.
From Tihar jail in India Roy continues to sell the property of his companies in order to complete the total amount of about 5 billion US dollars in compensation to millions of investors who had invested their money in securities of “Sahara”. The media reported that recent sales provided 93 percent of the total amount. Representatives of “Sahara” say they are not giving up on plans to invest in Macedonia, as well as to build a monument to Mother Teresa.
High morale and political corruption
“If corruption is not seen only as delinquency in the field of material and financial goods and transactions, then the case of Subrata Roy belongs to the obvious examples of high morale and political corruption, designed and provided by the top of the current government of Macedonia”, says Sasho Ordanovski, anti-corruption expert.
(The story was is supported within the NED project “Raising Awareness about Corruption through Investigative Reporting”)