BackSupreme Court gives Sahara a last chance to raise funds
The court will appoint a receiver and auction the conglomerate’s properties if it fails to submit a proposal to raise the funds
Premium(Hindustan Times)
New Delhi: The Supreme Court said on Friday that it will give Sahara group one last chance to raise funds to secure bail for its jailed chief Subrata Roy, warning that another failure to stump up the money would lead to seizure and sale of the group’s assets.
The apex court told lawyer Kapil Sibal that it would appoint a receiver to dispose of the assets should the group fritter away the chance, saying the case has to be “taken to its logical conclusion".
Whatever amount is raised from the sale would be deposited with the Securities and Exchange Board of India (Sebi) to refund people who invested in securities sold by two Sahara group companies through schemes that the market regulator ruled were illegal.
If the investors are not found, the money would go to the public exchequer, said the court.
Roy and two Sahara directors—Ashok Roy Choudhary and Ravi Shankar Dubey—have been in Delhi’s Tihar jail since 4 March last year after the Supreme Court sent them to judicial custody for failing to obey a court order to refund the money to the tune of ₹ 20,000 crore.
Later the same month, the court set bail at ₹ 10,000 crore—half in cash and half in the form of a bank guarantee—for their release from custody.
Sahara hasn’t managed to raise the money.
In February, its deal with Mirach Capital Group Llc to secure a $2 billion (around ₹ 12,540 crore today) loan to pay bail for Roy collapsed after it discovered that a Bank of America letter guaranteeing the money had been forged. The loan transaction had been approved by the Supreme Court.
On Friday, the apex court bench of justices T.S. Thakur, Anil R. Dave and A.K. Sikri told Sibal, representing Roy, that it was “neither good for your client, nor the system that a person is in jail, no matter how big the liability".
The bench, headed by Thakur, observed that both Sahara group and Roy had refused to regard court orders as sacrosanct.
The judges asked Sahara group to share details of its proposals to raise money against three overseas hotel properties with Sebi lawyer Arvind Datar and amicus curiae (friend of the court) Shekhar Naphade. Given the failure of two earlier proposals to raise money, the court sought details of the new plan in writing.
The hotels are Dream Downtown and Plaza Hotel in New York, and Grosvenor House in London.
The court said the fund-raising proposals needed to be critically scrutinized. Based on the “seriousness" of the proposals submitted, the court said it would permit Roy and the other two Sahara directors access to Tihar jail’s conference room, which has facilities for video conferencing and Wi-Fi Internet, to negotiate deals.
The court will consider the proposals on 23 March, when the case will be heard next.
As an interim measure, the judges allowed Roy, Roy Choudhary and Dubey access to five hours of communication time daily and two laptops.
At least ₹ 6,000 crore has to be raised by Sahara group, its lawyer S. Ganesh told the court. That comprises a bank guarantee of ₹ 5,000 crore and the remaining in cash. Sahara claims to have already deposited ₹ 4,000 crore with Sebi.
Naphade brought to the notice of the court that administrators appointed by Bank of China, a creditor to Sahara group, had taken charge of Grosvenor House.
Ganesh told the court that the Sahara group had found a foreign financial entity that had agreed to take over the loan from Bank of China. He said Bank of China was not in favour of a second loan on the property, which is why the group had to devise an alternative method to raise the money.
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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