Sahara chief Subrata Roy moved back to jail cell, office privileges withdrawn

NEW DELHI (Reuters) - Subrata Roy, the jailed chief of India's Sahara conglomerate, is back in a cell after living in a makeshift prison office for two months as he tried to negotiate the sale of his luxury hotels, a jail official said on Thursday.

The tycoon had been allowed to use an office, phone, internet connection and three secretaries in the Delhi prison to facilitate the sale of the three hotels including Grosvenor House in London and the Plaza in New York.

Roy needs to raise 100 billion rupees ($1.6 billion) from the hotel sales to have a chance of release on bail.

He was jailed for contempt of court in March amid a long-running dispute with the capital markets watchdog over Sahara's failure to repay billions of dollars to investors who were sold outlawed bonds.

Roy was moved back to a cell after a court-imposed deadline for the use of the office expired, although the businessman had requested more time, Tihar Jail spokesman Mukesh Prasad said.

"He was asking officials. We told him we don't have the power to extend those facilities," the spokesman said.

Sahara says it is in talks with multiple potential buyers but a company spokesman did not answer calls seeking comment on Thursday.

Last month, a senior company executive told Reuters that the firm would rather mortgage its trophy overseas hotel properties than sell them.

(1 US dollar = 61.6500 Indian rupee)

(Reporting by Aditya Kalra and Devidutta Tripathy; Writing by Himank Sharma; Editing by Stephen Coates)