 "Sahara faces default, wants to scuttle transaction, alleges Mirach Capital")
The entity, floated weeks ago to ease a structured deal between unnamed investors and Sahara, alleged members of the Sahara group had violated an exclusivity agreement. “We learned of this after representatives of the Sahara group approached members of Mirach’s syndicate. Following Mirach’s multiple notices to Sahara that they were in breach of the contract, Sahara began to take an adversarial position against Mirach and began to attempt to discredit and smear Mirach’s reputation,” the group said in a statement, responding to a questionnaire sent by Business Standard on Thursday.
A media report on Thursday had said Mirach Capital, led by California-based Saransh Sharma, had provided misleading bank documents to Sahara about its funding. Bank of America (BofA), projected as the banker for the $1-billion deal between the two sides, denied it was involved in the deal, as well as in issuing letters Mirach had allegedly provided Sahara, attesting to the funds Mirach claimed it had deposited with it.
Following BofA’s denial, the Sahara group, in a late-night press release, said it had felt cheated by Mirach and its officers, adding it “would not spare them”, even as it termed Mirach’s alleged actions “inhuman”.
The events have indefinitely prolonged Sahara chief Subrata Roy’s stay in Tihar Jail, where he has been held since March 2014 after his group entities failed to comply with a Supreme Court order directing the refund of Rs 24,029 crore collected illegally from 29.6 million investors. Despite summonses, Roy had failed to appear before the court.
As a condition for bail, the court has insisted the conglomerate pay about Rs 10,000 crore, which the Securities and Exchange Board of India (Sebi) said was raised from investors illegally.
Throwing new light on the process to secure bail for Roy, which the Supreme Court has sought to assist by providing special negotiation facilities inside the jail complex, Mirach said, “In spite of the court mandates to raise bail, Sahara has always been and continues to be an unwilling seller of these assets. It has repeatedly acted to undermine the transaction, and thereby waste(d) the time of our investors, Sebi, and the Supreme Court. The dangerous allegations made by Sahara are indicative of a direct intent to destabilise a deal structure that, given its high rate of return, would benefit Mirach and its investors.” The group said Sahara had carried out the latest act upon recognising its inability to make the first interest payment on the loan, which would put it in danger of losing its assets at a discounted rate.
“Any claim of Sahara being defrauded by Mirach is untrue and being presented in an effort to unravel the deal and shelter Subrata Roy,” Mirach said. “Proof of Mirach’s financial capabilities was previously verified directly with Sahara’s lawyers, and a simple meta-data test will show no documents have been forged. Upon agreement of Sahara, with support from the Supreme Court, to a sale of the assets, Mirach stands ready to publicly disclose the identity of our investors who have historically earmarked funds for this transaction to which Mirach has had access.”
Mirach said numerous financial institutions, legal counsel and investors had repeatedly declined an opportunity to engage with this transaction because of the public profile and legal troubles of Roy. It added it was withdrawing the complicated loan structure that allowed Roy to raise funds without selling the assets, including London’s Grosvenor House and New York’s Plaza.
“In light of the breach of contract, Mirach is no longer considering an offer for the loan structure; (it), however, remains ready, willing and able to facilitate an acquisition of these assets.”
When news reports expressing doubt about the credentials of Mirach and Sharma had emerged, the Supreme Court had directed the group to secure a clearance from the Reserve Bank of India.
Mirach said it had faced a number of challenges in closing this transaction. “Nevertheless, we remain steadfast and are ready, willing, and able to acquire these assets. The amicus curiae, Sahara’s legal counsel, Subrata Roy, and other essential parties, including our investors, have been made privy to the details, indicating our willingness and ability to successfully execute this transaction.”
Saransh Sharma
MIRACH CAPITAL VITAL STATS - Founder/chief executive: Saransh Sharma (pictured)
- Location: Miami, Florida
- Structure: Family office
- Formed: Two months ago
- Likes: Real estate, aviation, entertainment.
- Investors: Unknown
- Major deals: Yet to fructify
- Sister concerns: Antares Capital Management, Sharma Family Trust
- First love: Hotel assets of Sahara in London, NY
- Deal breaker: Probing media, Bank of America statement
- Latest headache: Allegations of fraud
- LinkedIn friend-turned-foe: Subrata Roy