Studied at IIT, IIM, owned business empire worth Rs 35000000000, this 'king of retail market' is serving 20-year jail term due to…, he is...
It is common for us to read about people who succeed against the odds, but once in a while, a story stops you in your tracks. This is one such journey that has ambition, achievement, and downfall all wrapped together. This individual excelled across several domains, including banking, business, and engineering. He was an IIT graduate. He held an IIM degree. He was once hailed as a retail pioneer in India.
The same man, once on the cover of leading magazines because of his retail group, turned out to be R. Subramanian. You guessed it! The same R. Subramanian who was the brainchild and force behind Subhiksha, a once 'broadly acclaimed' retail group that went from being a supermarket chain, convenience store, pharmacy, and most notably – a place to grab things quickly – to a business that failed. Despite being an alumnus of IIT and a graduate of IIM, he is jailed for 20 years due to….Well, he is R. Subramanian, the visionary behind the retail chain Subhiksha.
According to the court ruling on November 20, 2023, the distinguished IIT graduate and IIM alumnus was found guilty by a special court in Chennai of defrauding hundreds of investors. The court sentenced him to a 20-year sentence.
It began in May 1991 when Subramanian first dipped his toe into business and started Viswapriya, which claimed to be a financial services company. Things quickly began to take off, and major investors came to the table with their schemes that showed promise. Subramanian didn't have any allies or backers; he had nothing more than hard work and the belief he had in his idea. After a long journey, he disputed all limits of human aspiration and opened 1,600 outlets across India.
According to the Business Standard report (2015), Subhiksha opened its inaugural store in Chennai with an investment of $1 million in March 1997. By March 1999, it had expanded to 14 stores in Chennai, with 50 stores open by mid-2000. By 2006, Subhiksha had established itself in other states of Gujarat, Delhi, Mumbai, Andhra Pradesh, and Karnataka, opening 420 stores. Just two years later (October 2008), Subhiksha had become a common name in India, boasting 1,600 outlets and providing everything from groceries, fresh produce, pharmaceutical products, and mobile phones.
If media reports are to believed, the company's worth had reached Rs 3500 crore by then. Moreover, he was once trusted by Azim Premji, ICICI Ventures and Kotak Mahindra Bank. However, in a dramatic twist, things changed. Subramanian became involved in a web of financial misconduct, using investor money in questionable ways and making promises of high returns that couldn't be sustained. In 2023, the truth came to light—he admitted to a Rs 137 crore fraud. The fallout was severe: he was sentenced to 20 years in prison and faced hefty fines. This marked the tragic downfall of Subhiksha, a once-thriving retail dream that came crashing down. His involvement in financial misconduct led to investor funds being diverted through shell companies, leaving 587 investors still awaiting their refunds.
The court has fined him Rs 8.92 crore and the companies have collectively been penalized Rs 191.98 crore, of which Rs 180 crore is for compensating the depositors affected by the actions of the companies. The court has directed the amounts to be transferred to a designated authority to verify the investors' claim and to distribute the amounts as appropriate.
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