SC directs Sahara to show escrow account agreement to SEBI

Wants market regulator to list asset management agencies that could get a better price for Sahara properties up for sale

The Supreme Court asked the Securities and Exchange Board of India (Sebi) on Friday to suggest an asset management agency that could arrange better deals for the Sahara properties up for sale. The company is selling some of these to get Sahara chief Subrata Roy released from Tihar jail here. Roy has been imprisoned since March 4 on court orders and his bail requires Rs 10,000 crore, including Rs 5,000 crore in cash and the rest in bank guarantees.

Sahara told a bench headed by T S Thakur that it could not sell the two hotels in London and another in New York as Bank of China, which has charge on these, has put hurdles. Therefore, Sahara had found another entity to take over the entire loan and offer a ‘junior loan’. Post-dated cheques are ready and payments will be made to an escrow account, to be immediately transferred to Sebi.

Sahara counsel S Ganesh said the parties to the deals want the Supreme Court’s permission to go ahead. Once granted, at least Rs 5,000 crore will be available and the surplus can be used by Sebi to pay the investors. “Once permission is granted, we will not sit over even one rupee for a moment,” counsel emphasised.

Ganesh mentioned some figures, according to which the company’s properties in Jodhpur and Vasai will bring sufficient amount to fulfil the bail condition. The Aamby Valley is also on offer. However, the company could not get better prices as “unfortunately, the real estate market is at all-time low”. He challenged anyone to get a better price. Therefore, the judges suggested Sebi find an independent agency to take over the deals, so that Sahara gets better prices for its nine domestic properties.

Sahara offered to put all the money it obtained through sale in an escrow account, which will be immediately transferred to “Sahara-Sebi Fund” operated by Sebi.

However, Sebi counsel Pratap Venugopal wanted to examine the escrow agreement. When Sahara said that the escrow account will be managed by a US company, the judges observed that it would not be amenable to Indian jurisdiction. However, they asked Sahara to show the Sebi counsel the terms of the escrow account.  

At one stage, the judges remarked that Roy appeared to be “very comfortable” where he was staying, considering the delay in arranging the bail amount. The counsel said: “He is one of the captains of industry and he would not stay even one day more if he could avoid it.”

When the judges asked Sahara how Rs 140 crore in cash was reportedly seized recently from its Delhi premises, the counsel replied that it was meant to disburse wages to employees who have not been paid for three months. The case will be heard next week after reply from Sebi.