SC seeks Sahara reply on plea for auction of properties

By: | Updated: September 29, 2015 12:51 AM

Sahara has in the past year made failed attempts to raise money from its hotels and some other properties in India

chairman Subrata Roy has failed to raise even Rs 10,000 crore to secure his release from jail. (Reuters)Sahara Group chairman Subrata Roy has failed to raise even Rs 10,000 crore to secure his release from jail. (Reuters)

The Supreme Court on Monday sought the Sahara Group’s response on market regulator Sebi’s plea seeking appointment of a receiver to auction off the group’s domestic and foreign properties to raise money to recover liabilities of over Rs 36,000 crore, after chairman Subrata Roy has fai-led to raise even Rs 10,000 crore to secure release from jail.

A three-judge bench headed by Justice TS Thakur issued notice asking the group to respond as to why a receiver should not be appointed to take over and sell its properties.

Sebi had said that inspite of the apex court’s directions giving clear timelines, the group “in utter disregard, disrespect and disobedience of the directions… deliberately and wilfully, did not comply with them and thereby committed contempt of this court.”

However, the court refused to entertain impleadment application filed by the Helvetia group which showed its willingness to lend $5 billion to the Sahara Group for development of Aamby Valley project, which is valued at around Rs 1 lakh crore.

Senior counsel LN Rao appearing for the Sahara Group told the court that British Virgin Islands-based Helvetia group is ready to now give 720 million euros (Rs 5,000 crore ) towards bank guarantee  — to secure Roy’s bail — and the rest of the money will be brought in after they sign an agreement. “Due diligence will be over by October 15 and we will be  ready to bring in money thereafter within four weeks.  The three overseas hotels will have to be encumbered with us,” he said.

He further said the Sahara Group will pay Reuben Brothers which has taken charge of the three hotel properties. The three foreign properties —London’s Grosvenor House Hotel, New York’s Dream Downtown and The Plaza — are at present under the charge of David Reuben and Simon Reuben-led private equity firm Reuben Brothers after they refinanced the Sahara group by taking over the loan for around $900 million from BOC in June. Ruben Brothers had bought Sahara’s debt after the bank had declared it as a defaulter and had started looking for a buyer for the three offshore properties.

The judges, however, rejected Rao’s plea saying the bank guarantee will not be given by a third party, but by Saharas.  “We are not concerned with these people (Helvetia group). We don’t want to sanction any arrangement. Whatever arrangements they want to enter into that will be at their own risk. We don’t know who these people are. We can’t get involved in these international transactions,” the bench said.

Sahara has in the past year made failed attempts to raise the money from its hotels and some other properties in India.

“You are on a weak wicket. You must concede sometimes,” it also observed when senior counsel Gopal Jain, appearing for Gorakhpur Real Estate Developers Private, said the Saharas’ are not given good tiles of the property and one Surya Vir Singh is not an duly authorised to execute the MoU for development of  Sahara Group’s 140-acre land in Gorakhpur. Besides, he said that even the power of attorney given to Singh is not registered.

The judges also told the group that it had stopped the MoU from taking shape. “What is sacrosanct is the MoU and not the person, but the person must be competent enough to execute the MoU.”

The court had in August approved sale of Gorakhpur land to Gorakhpur Real Estate Developers Private surpassing the Rs 150 crore bid offered by Samriddhi Developers and settled the deal for Rs 152 crore.

The court also extended by another six weeks special facilities to Roy to facilitate communication for negotiating transactions to raise money.

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