 "Sahara properties to be sold at 90% of circle rates")
The move by a Bench of Chief Justice T S Thakur and Justice Anil Dave and Justice A K Sikri came after Sebi complained its efforts to sell some 67 properties did not receive much response as there were “a lot of issues” and the group said the embargo on selling assets below market rates was making it difficult to raise money for repayment to Sebi.
The court also extended the provisional release period of group chief Subrata Roy and Director Ashok Roy Choudhury to August 3. Ravi Shankar Dubey, the third group executive incarcerated with Roy but not released until now, was released on a provisional basis.
The court also allowed the group to remit £24 million pounds (around Rs 200 crore), which it had received as a bridge loan from Reuben Brothers, to the Sebi-Sahara account. Sahara said the loan was part of its ongoing discussions with the Qatar government for raising money out of its overseas hotel assets. However, the court added, the permission to remit the sum did not amount to approval of any arrangement the group might have with the lender.
Sebi expressed concerns that the value of these overseas properties were falling every day. The pound had touched a 31-year low following the Brexit vote.
Earlier, the Bench expressed its displeasure over the efforts made by the group during the period of Roy’s provisional release. “Did you sell anything? We are not satisfied with the way you are making efforts,” Thakur said. The court had released Roy and Roy Choudhury on May 6, following the demise of the former’s mother, for 15 days. It later extended the release by two months on the condition that the Sahara chief had to remit Rs 200 crore by July 11 and a further Rs 300 crore by August 3. Roy had gone on a nationwide tour to thank investors and employees who stood by the group during his jail term.
Thakur asked the group counsel Kapil Sibal, “Did your client travel from place to place? In what connection?” Sibal said his travel was “business related.”
Sebi informed the court that the sale process of Sahara properties initiated through SBI Capital Markets and HDFC Realty did not elicit any great response. While SBI Caps did not get any bids in the first stage, HDFC Realty had received a lone bid for Rs 58 crore. Sebi counsel Arvind Datar told the court that the agencies have received several responses from potential bidders citing various difficulties in the process.
In the properties in Uttar Pradesh, bidders are facing land ceiling issues as holding for a single buyer is capped. Other issues include encumbrances on the properties, where there are income-tax attachment orders, acquisitions by third parties and court stay orders, etc.
The court reminded the Sahara counsel of the history of the case leading up to the jail term for Roy and how even in jail he was given several facilities to raise money.
“We are giving you a long rope. You have remained outside for long now. The interim arrangement terminates and you go back to arrange Rs 5,000 crore for the bank guarantee,” Thakur said. After sending him to jail in 2014 for non-payment of dues to Sebi, the court had set a bail condition of Rs 10,000 crore to be paid half in cash and half in bank guarantee. While the group has remitted most of the cash portion, it has not been able to come up with the bank guarantee.
The court had in 2012 asked Sahara India Real Estate Corp and Sahara Housing Invest Corp to refund the Rs 24,029 crore they raised to Sebi along with an interest of 15 per cent per annum. The dues have since swelled to around Rs 40,000 crore.
The chief justice also brought up the receivership route, asking Sibal, “Please tell us why should we not appoint the receiver.” Sibal said, “It’ll destroy the business completely.”
When the court pushed, saying that efforts by Sebi has also come to a standstill, leaving it with no option but to appoint two more people in addition to Justice B N Agarwal as receivers, Sibal pleaded that he was not prepared, “Please postpone to another day.”
He argued, “Receiver should be appointed only if I owe money. How many depositors have come back for money?” The court warned Sibal not to get into questions which have been adequately addressed in previous orders of the court.
The court also passed directions relating to Sahara assets in Gorakhpur and Vasai, where part amounts are to be recovered from buyers.
THE TALE OF SAHARA
- Rs 24,029 crore raised by SIRECL & SHICL
- 29.6 million Number of investors
- Rs 40,000 crore approximate dues
- Rs 5,000 crore bail amount paid in cash
- Rs 5,000 crore bail amount in bank guarantee
- Rs 300 crore to be paid by August 3
- Aamby Valley, Maharashtra
- Sahara Star Hotel, Mumbai
- 60 properties across the country put on sale by Sebi; Not many takers
- Grosvenor House, London
- Plaza, New York
- Dream Downtown, New York