Lalit Modi connection emerges in Sahara hotel deals

Former IPL chief shooed off potential buyers at the behest of Sushanto Roy, says broker

Controversial businessman and former chief of Indian Premier League  (IPL) Lalit Modi, whose affairs derailed Parliament’s monsoon session, on Monday made a surprise entry into the Sahara housing bonds case in the Supreme Court.

Sreejit Tagore, a US-based property consultant, told the court when he approached Sahara chief Subrata Roy’s London-based son Sushanto Roy with an offer to buy the group’s stakes in New York Hotels, he was verbally directed to contact Lalit Modi. Judge T S Thakur checked with Tagore’s counsel if he was “IPL Lalit Modi”. The counsel confirmed Modi’s identity and said his client had written to Modi offering to buy stakes in New York’s Plaza and Dream Downtown hotels for $800 million. Tagore made these offers on behalf of his client Madison Capital LLC. However, Modi replied in a mail, which was also marked to Sushanto, that the group was sitting on an offer for $965 million and, therefore, was not keen on selling it to Madison, the counsel added.

Another buyer Kane Partners Ltd, a UK-based property firm, expressed interest in buying London’s Grosvenor House stake for £637 million. Sahara owns a leasehold interest in Grosvenor House.

The Bench asked Sahara if it was willing to pick up these offers. However, Sahara said it had two new offers itself and was not considering an outright sale. Sahara counsel Kapil Sibal placed before the court two new proposals. Sibal said the group had inked a memorandum of understanding on July 20 for a total size of $6 billion. “The London property has a huge potential. We are going to develop it further,” Sibal said.

Sibal also told the court about a second offer in which buyers have offered Sahara $2.1 billion for an outright purchase of all the three properties. “These two are really serious offers. There are other offers, not serious, also on the table,” the Sahara counsel said.

The court allowed Roy’s request to continue the availing special negotiation facilities in a conference room in the Tihar jail complex till September-end.

Sahara has been directed to present to the court a copy of its mortgage deed with Bank of China. This charge has now been taken over by Reuben Brothers. The court also asked the group to disclose its arrangement with Reuben Brothers after the amicus curiae and counsels of rival bidders raised concerns that the properties might automatically be transferred to the Reubens if the original agreement was mortgage by conditional sale.

Sibal objected to this. But the Bench intervened saying: “Their apprehension is whether you disclose the optimum you receive: You might get paid in America.”

When the amicus curiae  expressed concerns that the proceedings might be dragging on endlessly. Judge Thakur told the amicus curiae: “Do you think they will take the court for a ride and get away? They will certainly lose the sympathies of the court.”