The Supreme Court on Tuesday cleared Sahara Group’s proposal for the sale of four domestic properties in Chauma (Gurgaon), Jodhpur, Vasai (Mumbai) and Pune for about R2,616 crore so as to raise the bail amount for its jailed chief Subrata Roy. However, the court questioned the logic behind the group’s plan to raise a loan of $650 million (R3,900 crore) against three overseas hotels in New York and London.
A three-judge bench headed by Justice TS Thakur said since Sahara had already taken loan from the Bank of China on the three hotels — Dream Downtown and The Plaza in New York and Grosvenor House in London — raising further loan on the overseas properties would substantially increase the group’s liability.
At this, amicus curie and senior advocate Shekhar Naphade, who is assisting the court, said the fresh loan, which would be utilised for repaying the company’s debt with Bank of China and part-payment of the bail amount of R10,000 crore for the release of Sahara chief Subrata Roy, entailed a higher interest rate and a condition that it would be repaid within a year.
If Sahara failed to repay the loan within the one-year deadline set up by the new lender, it might lose the valuable hotels and suffer a heavy loss, which would not be in the interest of those 3.3 crore small investors who had subscribed to the R24,000-crore debenture venture floated by two Sahara companies, Naphade said.
Sebi senior advocate Arvind Datar also supported Naphade by objecting to the loan proposal, but subsequently said his client would not stand in the way, provided Sahara cleared doubts by furnishing all the details involved in the loan.
The bench then passed an order asking Sahara to provide the details regarding substitution of Bank of China as a lender in relation to its overseas properties as well as obtaining a junior loan to both the senior counsel within a week and posted the next hearing for December 17.
The court also set a condition that the buyers for these properties should furnish undertakings to ensure payment through post-dated cheques. It also directed the Sahara Group to handover the proceeds from the sale to the market regulator to facilitate bail for Roy.
The judges also suggested that an asset management agency could be approached to arrange better deals for the Sahara properties up for sale. The group also handed over the cheques totalling R184.5 crore to the Sebi raised from domestic sales.
The court will also hear on December 17 Roy’s plea for considering his release on bail. Roy is lodged in Tihar Jail here since March 4 for non-refund of around R38,000 crore as directed by the SC. The debenture issue had been declared illegal by Sebi and upheld by the apex court.
The court on March 28 said he could be released on paying R10,000 crore — half in cash and the rest as bank guarantee.
Appearing for Sahara, senior advocates S Ganesh and Rajeev Dhavan said the group did not want to sell the hotels in a hurry and planned to consider the sale only in 2016.
Last week, the Sahara Group had told the SC that it had managed to raise an additional $650 million through second mortgages by securing Sahara’s interests in the foreign hotel properties and this would amount to R3,070 crore net of all transaction costs. The group said that it had signed a master agreement with a company incorporated in Hong Kong known as Oasis Light, which has agreed to buy the rights of Bank of China.