Two more deals that Sahara had lined up to raise the funds to release its jailed chief Subrata Roy ran into trouble even as the Supreme Court asked the Securities and Exchange Board of India why it was not considering the ‘auction’ option.
Meanwhile, Sahara cousel Kapil Sibal said he was preparing an application saying how no business in the world 'can repay Rs 36,000 crore (Rs 360 billion) in 18 months'.
While a local realtor came up with a counter bid at a price nearly twice at which Sahara was planning to sell a 45-acre plot in Gorakhpur, another agreement to sell a land parcel in Choma village in Gurgaon ran into trouble after the counterparty obtained stay on the transaction from an arbitrator.
Gorakhpur Real Estate Developers has offered to buy the Sahara land parcel for Rs 110 crore (Rs 1.1 billion).
Sahara had signed a memorandum of understanding with another firm to sell the same plot for Rs 64 crore (Rs 640 million).
Sahara counsels protested, questioning the credibility of this new offer and whether the applicant would pay up the full amount immediately.
They contested that the original buyer had already paid a sum of Rs 12.8 crore (Rs 128 million) and was going to complete the transaction in a day or two.
The bench headed by T S Thakur asked the applicant if it was ready to pay up the entire sum upfront.
The Gorakhpur firm said it can pay 10 per cent up front.
The court allowed it to deposit the 10 per cent amount with the court and respond by Monday how soon it can pay the remaining.
If the new buyer is able to mobilise this sum, this could add a new dimension to the case as the judges asked Sebi to explore the option of auctioning the properties.
“Mr Datar, it (the fresh offer at double price) should be an eye-opener for you,” judge Anil Dave said.
When Sebi counsel Arvind Datar tried to explain that the regulator does not have the means to undertake such an operation, Dave asked the regulator to come out of a ‘denial mode’ and suggest “ways and means” in which such an auction can be done.
While Sahara counsel Rajeev Dhawan protested saying this could be an “invitation for disaster” as bidders might turn up for every transaction, Sibal referred to the case of Choma deal, where in spite of undertaking given to the court, the parties have gone to the arbitrator and got a stay on the deal.
Sebi moved an application raising concerns over the collapse of the Choma deal.
Last month, the Supreme Court had set elaborate terms for Roy’s release linking it to repayment of all dues to Sebi.
However, Sibal said he was in the process of preparing an application saying the steps suggested by Sebi would ensure Roy is “behind bars for life” and show how there is no way even the “biggest business house in the world can repay Rs 36,000 crore in 18 months”.
He also said a tax appellate body has upheld the Sahara claims of premature redemptions.
Its deals to raise money from the overseas properties have also dragged for around two years now.
Last month, the court had allowed Roy eight more weeks in his special negotiation facility in Tihar jail to come up with a solution.
Image: Sahara group chief Subrata Roy. Photograph: Reuters
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