Need $1.5 billion to release founder Subrata Roy.
By Sreekanth A. Nair
The Supreme Court of India has asked the market regulator Securities and Exchanges Board of India (SEBI) to initiate the selling process of 86 debt free properties of the Sahara group in order to pay back the money due to investors before releasing from jail its founder Subrata Roy and two directors on bail.
A three-judge bench, headed by Chief Justice of India TS Thakur, ordered SEBI to appoint an independent agency to sell the properties of the business group. Reportedly, $1.5 billion has to be raised initially to release Roy on bail.
The court also said SEBI to form a committee to oversee the activities.
The money should be arranged 50 percent in cash and the rest in bank guarantee in order to release Roy, Ravi Shankar Dubey and Ashok Roy Choudhary.
Sahara has to repay $5.3 billion to investors, including interest. Assets worth $6 billion are to be sold to settle the investors. The apex court has asked the market regulator not to sell any property if its bid money goes beyond 90 percent of the circle rate.
SEBI must seek the permission of the Supreme Court before going ahead with the sales proposal.
“You (SEBI) evolve mechanism and start selling the properties and we are passing the order to this effect,” the bench said.
The order was issued when senior advocate Kapil Sibal, who is appearing for Roy, informed the court that the company was finding it very difficult to sell the properties in the current market conditions.
Sahara group has already submitted the title deeds of the properties to SEBI. But it doesn’t include the titles of foreign assets and properties in India such as Aamby Valley City nor Sahara Star hotel.
The selling process is likely to start next week.
Sahara group Chief Subrata Roy has been in jail since March 24, 2014, after he failed to repay the money due to the investors who bought the company bonds which were sold illegally. A court order was also issued in this regard.
In February, the company had sought permission to sell its 42 percent stake in Formula 1 team Force India, four airplanes and Mumbai’s Sahara Star Hotel.
The company has many assets overseas, including Grosvenor House Hotel in London, the New York Plaza Hotel and the Dream New York Hotel. Sahara has already started negotiations to sell these assets.
SEBI moved the Supreme Court in August last year to recover the money from Sahara. Subrata Roy is said to have assets over $26 billion.