Sahara gets 3 months to submit final proposal to raise funds - Livemint

A file photo of Sahara chief Subrata Roy. Photo: HT

New Delhi: The Supreme Court on Monday gave Sahara Group three months in the last opportunity it will get to raise the Rs.10,000 crore it needs to free its jailed chief Subrata Roy and two other directors on bail.

A Supreme Court bench gave Sahara Group the go-ahead for negotiations to raise the money after its lawyer Kapil Sibal briefly outlined a fresh proposal to raise the funds.

“We give you a last opportunity to dispose of properties and raise money for bail,” said justice T. S. Thakur . “In case you are unable to do this, we will be left with no option but to appoint a receiver to sell Sahara properties.”

The court on 26 March last year said Sahara should pay half the bail money in cash and half in the form of a bank guarantee.

Under the proposal outlined by Sibal, Spanish Bank BBVA will provide a €900 million (around Rs.6,066 crore) line of credit to Hong Kong-based Nouam Ltd, which will use the money for paying and taking over a loan Bank of China had advanced to Sahara in purchasing three overseas hotel properties, Sibal said.

Sibal said Nouam has “real, clean and untainted” money and is also an unencumbered entity.

After clearing the loan, Sahara Group would be able to deposit nearly Rs.650 crore with the Sebi Sahara Refund Account, meant to compensate investors who bought securities sold by two group firms that the market regulator found to be illegal. Sebi refers to market regulator Securities and Exchange Board of India.

The remaining sum would be raised through post-dated cheques from sale of domestic properties.

A bank guarantee of Rs.5,000 crore would be raised through HSBC in India, routed through an Argentinian bank, Banco de la Nación Argentina.

After hearing the proposal, an apex court bench, comprising justices Thakur, A.R. Dave and A.K. Sikri , permitted Roy and the two other Sahara directors the use of conference facilities in New Delhi’s Tihar jail for negotiating the sale.

The properties include the Dream Downtown and Plaza hotels in New York and Grosvenor House in London.

The court allowed Sahara to sell 10 more domestic properties. Part of the Aamby Valley project in Maharashtra, about 600 acres, have been allowed to be sold as well.

Even as it cleared the path for Sahara and Roy to raise money for bail, the court raised doubts over its ability to pay nearly Rs.30,000 crore, including some Rs.20,000 crore it owes investors.

“Do you realise you have to deposit Rs.30,000 crore? What is your plan? You’re finding it so tough to raise Rs.10,000 crore... Give us a plan now,” Thakur said.

Sibal responded by saying Sahara Group wanted to get over the first hurdle of getting Roy out of jail.

“We are thankful to the Hon’ble Court for giving us permission to raise funds via mortgage and sale of certain properties,” lawyers for Sahara, Ayush Chaudhary and Abhinav Mani Tripathi, said in an emailed statement. “Looking at the magnitude of the transactions involved, the Hon’ble Court has allowed us 90 days time to work from the conference room within Tihar Jail court premises, extending the facilities of video conferencing and meeting with various parties.”

“Apart from the mortgage of the three foreign properties, court has also allowed sale of ten domestic properties and a land parcel of Aamby Valley City. We are in a very advanced stage with many parties and shall execute these deals at the earliest. We have already deposited nearly Rs.4,000 crore in the Sahara-Sebi Account and we shall be very shortly depositing the remaining amount along with the Bank Guarantee.”

Mirach Capital Group Llc , which is entangled in cross-litigation with Sahara Group after the collapse of a deal under which it was to advance money to the Indian conglomerate against the three overseas hotels, told the court on Monday that it was willing to buy the properties outright.

P. Chidambaram , Mirach’s lawyer, said few banks were willing to be escrow agents for the transactions with Sahara because of “integrity issues”. He added that the price Mirach was offering was likely to be better than other offers available to Sahara. The court allowed Mirach to formally make an offer, although Sibal clarified that Sahara Group wasn’t looking to sell the properties any more.

Roy and two Sahara directors were sent to judicial custody on 4 March last year for failing to comply with court directions asking the conglomerate to refund investors.

Sebi had ruled that the schemes under which two Sahara companies raised the money were illegal and the money so collected had to be returned to investors.

AFP and PTI contributed to this story.

Sahara has filed a defamation case in a Patna court against Mint’s editor and some reporters over the newspaper’s coverage of the company’s dispute with Sebi. Mint is contesting the case.