Sahara - massive, splashy, mysterious

Jag Ram Chaudhary invested with the Sahara conglomerate - 1,300 rupees a month in his case - to put away money for a rainy day.

"My wife had an accident some years back. I don't have much savings, so I thought I'll be able to save some money by putting in a small amount every month," said Chaudhary, an office helper at a construction company in Uttar Pradesh.

On August 31, the Supreme Court ruled that finance schemes run by two Sahara companies were illegal and ordered it to repay as much as $4.5 billion to up to almost 30 million mostly small investors, plus interest. The final figures are still to be determined as some clients have already redeemed their investments, lawyers on both sides of the matter said.

The case has shone a rare light on the unlisted giant whose interests range across finance, housing, media and entertainment.

Sahara has accumulated a string of trophies in recent years, including a stake in a Formula One motor racing team and ownership of Grosvenor House hotel in London. In July, it agreed to buy a controlling stake in New York's Plaza Hotel.

But its core client base is the towns and villages away from the shiny cities of modern India. There, Sahara sells investment products to often poor people in amounts as small as 2 rupees (4 U.S. cents) a day. The company is a household name in India through its lead sponsorship of the national cricket team.

"Banks take eight years to pay what I get from Sahara in five years," Chaudhary, 40, said in Khalilabad, a town in Sant Kabir Nagar district in Uttar Pradesh. Like several Sahara customers interviewed nearly two weeks afterwards, he had not heard of the court ruling.

SPENDING POWER

Critics, including activist groups, say Sahara's investment products are designed to evade oversight by financial regulators and that it lacks transparency on the source and use of its funds, selling products to investors who do not understand the risks and ploughing the proceeds into real estate projects.

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