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The Sahara group is looking to raise money from its most valuable asset, Aamby Valley, luxury township project off the Pune-Mumbai highway, as it faces formidable blocks on the other avenues it was exploring to bail out its jailed chief, Subrata Roy.
A $1.05-billion loan agreement with Miami-based Mirach Capital Group broke down amid allegations and counter-charges of fraud. A company that had presented post-dated cheques for purchase of Sahara’s Indian properties sought more time to deposit the sum. The group also faced the Supreme Court's wrath after the Reserve Bank of India (RBI) said it was using funds raised by liquidation of certain securities for purposes other than those allowed by the judges.
The group has to present Rs 10,000 crore in cash and bank guarantees to secure Roy’s bail. He is at the Tihar jail here, for not complying with an old SC order to repay Rs 24,029 crore raised illegally by two group firms, Sahara India Real Estate Corp and Sahara Housing Invest Corp.
Sahara counsel Rajiv Dhavan told the court raising money from Aamby Valley was one of the three measures the group was considering for raising Roy's bail money. He was applying for extension of negotiation facilities for Roy.
Arvind Datar, counsel for the Securities and Exchange Board of India (Sebi) recalled the group had earlier contended Aamy Valley was itself worth at least Rs 38,000 crore. Why, he asked, was the group not selling it to pay the dues? Datar said this was the fourth time the group was starting negotiations and the earlier ones had gone nowhere.
“The third proposal is to proceed with Aamby Valley,” Dhawan said. “Even for Aamby Valley, things have to be worked out.” It was a business decision, he added, and one could not be forced to sell anything.
Noting the Sahara chief’s incarceration would see its first anniversary on March 4, Dhawan initially pleaded for the court to extend the negotiation facilities provided inside the prison for another 15 days, as the group was considering two more deals, which were at an “exploratory stage”.
The first proposal, apparently, was for a $1.53-billion loan from undisclosed private investors, syndicated by an European Bank. The second was an investment proposal from a Dutch pension fund.
The bench of judges T S Thakur, A K Sikri and Anil Dave did not allow the extension of the special facilities and adjourned the matter to March 13. Judge Thakur said, “You are placing your business above personal liberty. Why don’t you sell and earn your liberty?”
He directed the group to present the proposals before Sebi and the case's court-appointed amicus, before bringing it to the judges. Amicus Shekhar Naphade expressed concern, saying that even during the recently collapsed deal, Sahara had vouched for the credibility of its counter-party.
Earlier, the court asked RBI to look into the alleged misuse of securities earmarked to secure the liabilities due to the investors of Sahara India Financial Corp (SIFCL) and pass appropriate orders after giving a hearing. It also allowed the central bank’s application to implead itself in the case between Sebi and Sahara.
RBI quoted auditors of SIFCL to show how Rs 484.67 crore, being proceeds of sale of securities, were loaned to the partnership firm. Sahara counsel S Ganesh argued these figures were factually incorrect. He said SIFCL had actually transferred this amount to the partnership firm so that this could be repaid to SIFCL depositors across the country. “Only a small amount has been used to deposit in the Sebi–Sahara refund account.”
Judge Thakur asked, “We never allowed you to do that. How could you do that?” He warned, “ Your problems are increasing… That is all your doing. Already, income tax, RBI and Sebi are here. We don’t know how many more agencies are waiting.”
The bench directed the Sahara group to file an affidavit “explaining the circumstances under which securities under question were sold and the sale consideration was transferred to the Sahara India partnership firm instead of the Sebi-Sahara refund account.”
Separately, Sai Rydan, one of the buyers of its Vasai property, said it could deposit only Rs 50 crore against an instalment of Rs 232 crore it had undertaken to pay by February 16. The court is expected to take up the matter in due course.
