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Business News/ Companies / News/  Plaza sale for Subrata Roy bail blocked by JTS Trading
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Plaza sale for Subrata Roy bail blocked by JTS Trading

The company said it was shut out when a Sahara subsidiary made a separate deal with the UAE company

A file photo of Subrata Roy. Photo: BloombergPremium
A file photo of Subrata Roy. Photo: Bloomberg

Mumbai/Delaware: The sale of the Plaza and Dream hotels in New York and London’s Grosvenor Hotel by an Indian conglomerate trying to raise money to bail its majority owner out of jail hit another snag as a Hong Kong investment company sued claiming it was unfairly shut out of the deal.

JTS Trading Ltd’s US suit seeking to block Sahara India Pariwar from going ahead with the sale of the hotels may hamper the company’s effort to raise $1.6 billion bail for its controlling stakeholder, Subrata Roy. He was jailed in India last year for failing to comply with a court order to repay investors.

JTS Trading claims it struck a deal with a United Arab Emirates private trust to finance the purchase of the three hotels, with JTS trading getting a 70% stake for its $850 million investment. The company said it was shut out when a Sahara subsidiary made a separate deal with the UAE company, Trinity White City Ventures Ltd.

Sahara is attempting to raise money for Roy’s release. He was sent to prison in March 2014 after India’s markets regulator said the company should repay investors $3.9 billion for selling a convertible debt instrument without approval.

Roy failed to convince an Indian court that Sahara had refunded the money raised from 30 million investors.

India’s Directorate General of Economic Enforcement also alleged the Sahara investors “are fictitious identities created to conceal an even more nefarious money-laundering operation," according to JTS Trading’s filing in New York state court.

Administrator named

The Indian court appointed an administrator to oversee the sale of the Grosvenor Hotel, but Sahara averted the enforced sale after negotiating a deal with David and Simon Reuben, the UK-based investors with stakes in real estate, pubs and racing tracks who are valued at $6 billion each, according to the Bloomberg Billionaires Index.

The investor-duo were in final discussions to take over loans owed to the Bank of China, according a statement from Sahara.

“The deal restores Sahara’s ability to renegotiate the loan terms with the new lender, or with third parties," the company said in the 7 June statement.

Pune-based billionaire Cyrus Poonawalla, owner of the world’s biggest vaccine maker, Serum Institute of India, as well as the Sultan of Brunei were also said to be interested in buying the hotels in 2014. No agreements were reached.

Roy built the Sahara empire over the past 37 years and it now includes overseas hotels, television stations, a hospital, a dairy farm, retail shops and a stake in India’s only Formula One racing team. He built his business by collecting as little as 32 cents a day from rickshaw pullers, laundry washers and tire repairmen. Bloomberg

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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Published: 23 Jun 2015, 11:19 PM IST
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