Home / Companies / News /  Sahara assets: SC seeks fresh suggestions as Mirach deal collapses

Mumbai/New Delhi: The Supreme Court on Wednesday sought fresh suggestions on dealing with the properties of the Sahara group, after it was informed that its deal with US-based Mirach Capital Group Llc had collapsed.

In a separate development earlier in the day, Mirach Capital, which had agreed on a $2 billion loan for Sahara, said in a statement that it has returned the due diligence fee of $2.625 million, ending the deal. The loan would have helped secure bail for the group’s jailed chief Subrata Roy. In an emailed response to a query, Sahara said Mirach has not refunded the retention fee even though it has promised to do so.

The Supreme Court, which is hearing the case, asked the Sahara group and lawyer Shekhar Naphade, who is assisting the court, to suggest alternative modes of dealing with Sahara’s properties. Naphade, amicus curiae (friend of the court) in the case, informed the court of the conflicting claims by Sahara and Mirach. The group claims that a Mirach letter purportedly from Bank of America (BoA) had been forged.

On Wednesday, S. Ganesh, the lawyer for Roy and Sahara, told the court they had been “victimized" by Mirach. The court asked Sahara to include its grievances in a document to the court.

On 5 February, the Sahara group said it discovered that a BoA letter submitted by Mirach Capital guaranteeing the money had been forged.

Mirach’s statement on Wednesday asked the Supreme Court to “intervene and allow" it to buy Sahara’s assets for $2.05 billion. The apex court will decide on the fate of the Mirach-Sahara deal on 20 February.

In the statement, Mirach claimed it has remitted the full retention amount back to Sahara, “in an effort to show the Honorable Supreme Court of India the group stands willing to incur costs while waiting for a fair ruling on February 20th,"

Sahara said it is pursuing legal action against the “criminal conduct" of Mirach Capital and its officers in India and the US. Dismissing Mirach’s claim to buy Sahara’s assets, the company said the financial capabilities of Mirach Capital and its chief executive Saransh Sharma are doubtful. “We are working on another deal," Sahara said.

The Mirach statement, though silent on the alleged BoA letter, asked Sahara to make a “formal apology" for tarnishing its image, failing which it warned of legal action and demanded over $13 million in compensation for breach of contract.

According to a 10 December agreement with Sahara, Mirach was entitled to fees related to legal, accounting and transaction-related costs.

Mirach said that although it had incurred expenses of $1.075 milllion in related closing costs, it has returned the entire money to the Sebi-Sahara fund to “wipe the slate clean amongst unfounded allegations by Sahara in the media."

Mirach’s Sharma has also written to market regulator Securities and Exchange Board of India (Sebi), the amicus curiae and Sahara representatives about the remittance. “...our CEO Saransh Sharma also stated that a notable bank would be contacting all applicable parties within the week confirming that blocked and earmarked funds are available for the purposes of completing the previously contemplated loan transaction, which will now be applicable towards a sale of Sahara’s assets," said Mirach.

In an interview with Mint in January, Sharma had said that the $2 billion loan package to the Sahara group comprises $882 million to Bank of China, $650 million to the Sebi-Sahara fund and $450 million divided into $180 million to Sahara Star and $270 million to the resorts silo of the Aamby Valley project. Sharma said that the loan is being split among a total of five investors. The court is considering the case of Roy’s bail and the repayment of money the group collected through schemes deemed illegal by Sebi.

Roy and two directors of Sahara group firms were remanded to judicial custody on 4 March 2014 for defaulting on an undertaking given to the apex court. On 26 March, the court modified this order to include a 10,000 crore bail amount—half to be paid in cash and the rest in the form of a bank guarantee.

Sebi had proceeded against the group for failing to obey a court directive to refund a sum of around 20,000 crore to investors from whom the two Sahara firms had raised the money through schemes that the regulator ruled were illegal.

According to Sahara, it had deposited 5,120 crore with Sebi in December 2012 and then 3,170 crore in June 2014. Subsequently, on 17 December, the firm gave Sebi a cheque of 77.80 crore, representing the entire balance purchase price of its Jodhpur property, in the Supreme Court.

In addition, Sahara claims that it has given 21 post-dated cheques worth 1,884.96 crore related to the sale of Sahara’s domestic properties. This amount is payable between 15 January and 22 June 2015.

At Wednesday’s court hearing, Sahara also told the court it had received a clearance from the Reserve Bank of India on the three overseas hotels under foreign exchange laws.

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.

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