Sebi to outsource Rs 40k-cr Sahara job

Market regulator in talks with SBI Caps, UTI Infra for scrutiny and auction of properties

The Securities and Exchange Board of India (Sebi) is planning to outsource the Sahara property auction job, which could be worth at least Rs 40,000 crore.

The regulator is in talks with SBICAP Trustee Co, a wholly-owned subsidiary of investment bank SBI Capital Markets, and UTI Infrastructure Technology and Services, for potential sale of 87 properties, part of the long effort to recover money from the Sahara group.

The move comes after the Supreme Court (SC) allowed Sebi to sell Sahara group properties for generating the bail money required for the release from jail of the latter's chief, Subrata Roy.

The hearing on Sebi’s application for appointing a receiver to auction Sahara’s properties is scheduled for April 27.

“The claims made by Sahara on the properties and the respective title deeds can be only verified when we appoint some third party for verification,” a Sebi source told the Business Standard.

It is unlikely that the regulator would float a tender to manage the task. “The properties cannot be managed internally. The court has suggested an external agency be appointed for this and the regulator would probably suggest some outside agencies to the court,” said the person cited above.

The exercise could involve 87 properties in 71 cities, covering 7,161 acres, of which 47 title deeds seem clear, from the details given by Sahara before the SC in 2013.

The 71 locations have some huge properties. These includes Pomgaon and Kumheri villages near its Aamby Valley project in Pune district. The other big chunks are in Faridabad, Noida, Muzzafarnagar and Haridwar. These together could account for Rs 12,000 crore.

Details given to Sebi reflect that the properties are largely in agricultural or vacant lands. “Title deeds are one issue. The outside agencies need to examine the documents of all the properties figured and at the status of the said lands. This could take several months,” said a property consultant, who did not wish to be named.

The entire property sale  is likely to generate a huge cash pile for the government, as the regulator has received investor refund claims worth only Rs 540 crore so far. Sebi’s recent all-India advertisement through 144 publications has clearly said this is the last chance for investors to register their claims for a refund. Two Sahara group entities had raised nearly Rs 24,000 crore through optionally fully convertible debentures from 30 million investors.

The issue ran into controversy, leading the Supreme Court to order the refund of the entire money to investors, with 15 per cent yearly interest.
MARKET REGULATOR’S PLAN
Outsource Sahara property auction job

SBI CAPS, UTI INFRA
Can be appointed to auction Sahara's massive real estates

47 PROPERTIES
have clear title deeds, claims Sahara, of the total 87

TITLE DEED
Is a legal document constituting evidence of a right, especially to ownership of property

BIGGER PROPERTIES
Could be liquidated first

HEARING
On Sebi's plea for appointing a receiver is scheduled for April 27 in SC

A RECEIVER
Is a person or entity chosen by a court to be in charge of a company that is bankrupt