Supreme Court asks Sahara for list of all group assets

SBI Caps, HDFC Realty to begin sale process; Court to consider plea for parole of Roy after seeing success of sale process

The Supreme Court on Wednesday asked the Sahara group to submit the complete list of properties owned by it, along with indicative valuation in a sealed cover. The move, aimed at securing the dues of nearly Rs 40,000 crore, came after a group counsel said that the 67 properties that are being put on sale by the Securities and Exchange Board of India (Sebi) could be worth around Rs 6,000 crore, less than a third of the Rs 20,000 crore projected earlier.

The sale process was cleared by the court and the process could begin soon. Sahara moved an application for parole of jailed chief Subrata Roy, but the court decided to consider it only after seeing how the sale process goes. The matter was adjourned to May 11.

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Earlier, Sebi counsel Arvind Datar told the court that the regulator had entrusted the job of selling 60 of the 67 Sahara properties being put on sale to SBI Capital Markets and HDFC Realty. Sebi set out the various conditions for the sale process and had asked the two agencies to quote their charges for the job. Sebi, then, asked the agency that quoted the higher of the two quotations to match the charges quoted by the other agency.

Accordingly, the first sale would fetch a commission of one per cent, while the second, third, fourth and fifth transactions would fetch 0.5 per cent commission, while the remaining deals would get the agencies a commission of 0.4 per cent. The agencies would have the discretion to choose any property for sale first.

The entire sale process, which would be done through e-auction, should be completed in four months. If no sale happens within this period, the agencies would get a minimum fee of Rs 30 lakh.

Sebi would boot the e-auction charges and the costs of nationwide advertisements to be published in national and regional newspapers.

The terms of the process to be followed were agreed in the presence of retired judge B N Agarwal, appointed by the Supreme Court at a meeting on April 21, Datar told the court.

The process would start in the immediate future, Sebi told the court.

Sahara counsels expressed their concern that the intermediaries are going to cost a huge sum, given the number and value of properties to be sold and that they could do it themselves without so much fee. Rajeev Dhavan representing the Sahara group said the process is incentivised and “the incentives are considerable”.

Chief Justice T S Thakur said, “The die is cast. Sale is going to take place. Ask your well wishers to participate in the process.”

At this stage, Dhavan put forward an application of parole for Sahara chief Subrata Roy.

Dhavan said only Rs 100 crore was left in the Rs 5000 crore bail amount required to be submitted and this could be adjusted against the interest accrued on the sum already submitted. He added that since the group was finding it difficult to get the bank guarantee for an equal amount, the court could consider the properties now being put on sale as an alternative security since these are worth about Rs 6,000 crore. The Rs 6,000 crore value would be at 90 per cent of circle rates, the minimum price at which these could be sold. “Instead of bank guarantee, you have the properties — this property is a security,” Dhavan argued.

He said the court should consider the application on humanitarian and health grounds. He said Roy had already spent two summers in the jail. “I don’t think he can survive the summer... He will go crazy,” Dhavan added.

If not parole, at least a house arrest could be considered as he assists in the sale process. When the court asked Sebi’s opinion, Sebi counsels Datar and Pratap Venugopal expressed their concerns over the title deeds.

At this stage, judge A R Dave said, “I don’t see any compliance. Where is the compliance?” Dave asked if Sebi knew what was the total number of properties of the group and if it had the complete list of properties of the group. Thakur added, "We want to know what is the extent of property. This Rs 6,000 crore may cover the release. But, that's not enough for the whole amount," which is close to Rs 40,000 crore.

Datar referred to the status report where Sebi said that against Sahara’s statement to the court that there were two separate lists of Rs 20,000 crore worth of properties, it found only one list. And in that list, instead of 86 properties as submitted by the counsel, there were only 71. Of this, three properties belonged to Aamby Valley and were not to be sold as per the court’s directions and one was a property in Vasai, which was already under the sale process. Thus, Sebi had only 67 properties to sell, of which it is taking up 60 in the first stage.