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The Supreme Court (SC) on Tuesday allowed the Sahara group to sell offshore assets to raise money to clear its Rs 37,000-crore repayment obligation on its controversial convertible debentures.
The case has put Sahara chief Subrata Roy and two of his top deputies in jail, on an SC order to either produce a credible plan to pay the money or stay in custody.
The payment has to be made to the Securities and Exchange Board of India (Sebi), which in turn is supposed to ensure distribution to about 30 million investors.
The bench of judges, chaired by T S Thakur, declined to offer any other relief to Subrata Roy, in the city’s Tihar jail for four months.
According to the order, posted on the court website, “..three offshore hotel properties owned by Saharas are allowed to be transferred, sold or encumbered, subject to the condition that the entire sale consideration received by the Saharas after repayment of the loan outstanding towards the Bank of China is deposited with Sebi, towards compliance with the directions contained in the conditional bail order dated March 26...”
The court had at the time granted bail to Roy on the condition that the group deposited Rs 5,000 crore in cash and a bank guarantee for another Rs 5,000 crore. The group has so far deposited Rs 3,117 crore in cash with Sebi.
The order added that, “the excess amount, if any, shall be deposited by the Saharas in a separate account to await orders from this court regarding their utilisation. The sale of the offshore properties shall not be at a price lesser than the value estimated by CBRE and JLL for the said properties, reduced at the most by five per cent of such value”.
The judges declined to alter the conditions for bail or grant any parole to facilitate negotiations, as had been requested by the group in recent applications. “There is, at present, no concrete proposal with Saharas for sale of the properties in India or abroad that may call for any negotiation by Shri Subrata Roy...While it may be true that such negotiations cannot be said to be advisable when properties of such magnitude as in the instant case are sought to be sold, yet it is premature for us to make any arrangement to facilitate any such negotiations either by directing release of (Roy) on parole or otherwise,” the judges said. Adding, however: “If a situation arises in which negotiations become essential, this court may consider passing orders to facilitate these...”
The court also said it would modify its earlier order to appoint senior lawyer Fali S Nariman to assist it in the case, after he’d declined to do so, citing his earlier engagement with the Sahara group. It said it requested Shekhar Naphade, senior advocate, to replace Nariman for the job.
Roy has been lodged in Tihar since March 4 to ensure compliance of the earlier court order to refund the money collected by Sahara India Real Estate Corporation and Sahara Housing Investment Corporation. The firms raised Rs 24,029 crore by issuing optionally fully convertible debentures to 29.6 million investors. After finding these illegal, the SC in its August 2012 order directed the firms to refund the sum raised to investors, along with interest.
While the Sahara group has been arguing that it had already repaid a substantial portion of the amount raised, the court has not accepted this plea.
THE STORY SO FAR
- Subrata Roy was sent to jail on March 4 this year for non-refund of over Rs 37,000 crore to depositors
- Roy was asked by the Supreme Court to pay Rs 10,000 crore to get bail, out of which Rs 5,000 crore in cash and rest of the amount in bank guarantee
- Sahara has so far raised Rs 3,117 crore which has been deposited with the market regulator
- The group, however, has been arguing that had already repaid a substantial portion of the amount raised
