NEW DELHI - The head of India's giant Sahara group surrendered to police Friday, two days after the Supreme Court ordered his arrest over delays in repaying billions of dollars illegally collected from small investors.
Subrata Roy "wilfully submitted himself" to police in Lucknow, capital of northern Uttar Pradesh state where the group has its headquarters, Sahara's executive director told a New Delhi news conference.
"As a law-abiding citizen of the country, this morning he wilfully submitted himself to Lucknow police. He is co-operating with the authorities," said Seemanto Roy, who is also the son of Subrata Roy.
On Tuesday, the court ordered Subrata Roy's arrest over delays in repaying money collected from rural savers through bond sales.
The Sahara empire extends from a stake in a Formula 1 racing team to a sprawling Indian luxury township, and once included the iconic New York Plaza Hotel.
Sahara, a famous name in India through its former sponsorship of the national cricket team, raised some 200 billion rupees (S$4.1 billion) from millions of savers in a process judged by authorities in 2012 to be against the law.
Sahara maintains that it is only helping small investors outside the banking system and that it has never defaulted on them.
Roy's lawyers Friday asked the top court to withdraw the arrest warrant but the request was turned down and the matter was listed for hearing next week.
Sahara's woes began in 2008 when it shut operations as India's biggest non-bank deposit-taking firm on orders of the court, which was worried about the soundness of investments in which money was being parked.
Observers say much of Sahara's fundraising success rested on the fact vast numbers of rural Indians have no access to banks and no other place to put their money than in poorly regulated non-bank institutions.
Subrata Roy, often photographed wearing a black vest over a white shirt, keeps a low profile.
He rarely gives interviews but enjoys throwing lavish parties at his Lucknow mansion which are attended by Bollywood celebrities and top political leaders.
In a statement released to the media Friday, the group said it had always put "our beloved nation ahead of any business interest and ensured compliance to the law of the land".
The statement quoted Subrata Roy as saying he was unable to handle "this level of agony and humiliation" and was willing to comply with the court's orders.
He also accused a section of the media of "bullying" and "character-assassination".
On Friday, the company's stock was down two per cent following news of his surrender and uncertainty over the group's future.