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Sahara sells stake in Grosvenor House, gets 10 days to deposit Rs 710 cr

Court gives 10 working days for repatriation of 75 mn pounds towards payment to Sebi

Grosvenor House Hotel

The Sahara group on Monday told the Supreme Court that it had sold its interests in London’s Grosvenor House Hotel to GH Equity UK. Sahara lawyer Kapil Sibal told the bench of Dipak Misra and Ranjan Gogoi that the sale had been completed, and sought permission to transfer funds from the deal to the Sebi-Sahara refund account. Sebi is Securities and Exchange Board of India.

While Sibal did not disclose the exact amount, he said about £75 million was being brought to India and suggested the transaction also involved refinancing of funds connected to its interests in The Plaza Hotel and Dream Downtown Hotel in New York. According to the court's order in April, Sahara was to deposit Rs 1,500 crore by June 15 (last Thursday) and a further Rs 522 crore by July 15. 

A post-dated cheque for Rs 1,500 crore given by the group was dishonoured. Following this, the group was able to arrange a remittance of Rs 790.18 crore as of Monday. After Sibal cited technical difficulties as the buyer of the London properties insisted on remittance to the Sebi-Sahara account, the bench allowed the group 10 days for the remaining sum of Rs 709.82 crore to be remitted.

Posting the matter to July 5, Misra warned that the court would be “compelled to send the contemnors to custody” if the new deadline was not adhered to. “Pay and get out,” he added. 

Sebi informed the court that with Monday's payment, the group had remitted a total of Rs 10,395 crore. 

The matter pertains to two group entities, Sahara Housing Investment Corporation and Sahara India Real Estate Corporation, that had raised Rs 24,029 crore from 29.6 million investors between 2009 and 2011 by issuing optionally fully convertible debentures.

Sebi held these issues illegal and directed that the sum be refunded to investors. In 2012, the apex court upheld the Sebi order and directed the group to return the amount raised with interest of 15 per cent. 

Meanwhile, the official liquidator of the Bombay High Court informed the Bench that the schedule and terms and conditions have been finalised for the auction of Aamby Valley under the guidance of retired judge B N Agrawal, who is supervising the refunds in the case and sought the court's approval for the same. 

The Bench took note and said it would be taken up in the next hearing. The court is following a two-pronged strategy for recovery of dues. On one hand, it has set a stiff deadline for payments by the group, even as it is preparing ground for an auction of Aamby Valley, the Sahara group-owned luxury hill township on Pune-Mumbai Highway, which is estimated to be worth over Rs 37,000 crore.

On Monday, the apex court directed that a 87-acre property in Haridwar belonging to the group be e-auctioned by Sebi after the group sought permission to sell it for Rs 109 crore, which was about 38 per cent less than the circle rates.

Distress sale
  • The stake sold to GH Equity UK, the company tells the Supreme Court, to raise money for payment to Sebi  
  • The Grosvenor House deal involves refinancing funds connected to its interests in New York’s Plaza and Dream Downtown hotels 
  • The SC gives 10 days to the company for repatriation of £75 million towards payment to the regulator