Sahara case: SC seeks alternative ideas

The group has to sell assets to raise money to repay Rs 24,029 cr due to 29.6 million investors in two group firms

In the case before the Supreme Court regarding the Sahara group of companies' payment obligations, the judges on Wednesday asked it and amicus curiae Shekhar Naphade to suggest other methods of raising money from the group's assets.

This is after an attempt to secure a structured loan from Miami-based Mirach Capital Group unravelled amid allegations of fraud and forgery.

The group has to sell assets to raise money to repay Rs 24,029 crore due to 29.6 million investors in two group firms. Of this, it needs Rs 10,000 crore in equal parts of cash and a bank guarantee, to secure the bail of its jailed chief, Subrata Roy. The latter is in the capital's Tihar prison since March.

The Mirach deal was the one he'd chosen among several offers that he'd considered for the group's foreign hotel assets, via a video-conferencing facility allowed by the court inside the jail complex.

The court on Wednesday asked Naphade to offer formal ideas after he verbally suggested an external agency be appointed to supervise the sale of assets and secure investors' money. This is after Mirach Capital writing to Naphade and the Securities and Exchange Board of India (Sebi), communicating its earlier media statements about withdrawal of the structured loan. Mirach's chief executive, Saransh Sharma, however, continues to maintain that his investors are still interested in buying out the luxury hotel assets, Grosvenor House in London and the Plaza in New York.

The SC had given a nod to a specific deal involving the transfer of a sum of $1.05 billion, supposed to be held in a Bank of America (BofA) account in the US to a Mauritius-based subsidiary of Aamby Valley Ltd, the latter a part of the Sahara group. This deal had collapsed after a BofA spokesperson told Reuters last week that the bank was not involved.

In an interview to Business Standard, Sharma of Mirach said while the Miami-based special purpose vehicle indeed had an account with BofA, the bank did not want to be part of the Sahara transaction, citing what he termed "integrity issues."

"The email verifying financial capabilities was received directly from Bank of America (BofA) to Sahara. As I previously stated, a simple meta-data test can confirm this. A few days later, BofA Corporate informed us that they would not be a party to this transaction in any way, shape, or form citing integrity issues with Sahara," Sharma told Business Standard.

On the Sahara plan, he said, "In my opinion, his game plan is simple, he is awaiting a sweetheart deal: a complete bailout package-no liens, very few security documents in place, over two-three years to pay the money back, with very low interest rates."

The Sahara group had last week filed a document informing the apex court it was cheated by Saransh Sharma. In a statement last week it had said, "We are astonished and feel cheated in such an adverse environment against us. We strongly condemn such inhuman conduct of MCH (Mirach) and its officers and make it clear that Sahara will not spare them. We will take up all suitable legal proceedings against MCH and their officers involved in the transaction, both in India and in USA."