Supreme Court asks Sahara to submit fresh fundraising plan

By Sumeet Chatterjee

MUMBAI (Reuters) - Supreme Court has asked conglomerate Sahara to submit a fresh plan for raising funds against its properties after the collapse of negotiations with a U.S.-based firm last week, an independent lawyer advising the court on the case said.

Sahara has struggled to raise cash to fund $1.6 billion in bail money for its boss Subrata Roy, being held in a New Delhi jail since March on contempt charges, after he failed to comply with a court order to repay investors in a bond scheme that was later ruled to be illegal.

Last week, Sahara described as forged a Bank of America letter intended to show U.S.-based Mirach Capital had enough funds to arrange a $2 billion loan deal, which involved refinancing its overseas hotels, including New York's Plaza and Grosvenor House in London.

Mirach has denied forging the bank letter and has accused Sahara of trying to "discredit and smear" its reputation.

Shekhar Naphade, an independent lawyer advising the Supreme Court on the case against Roy, told Reuters the court had asked Sahara to submit a new fundraising plan, adding the case would resume after Sahara submits its proposal.

A spokesman for Sahara did not immediately respond to emails seeking comment. Mirach Chief Executive Saransh Sharma also did not immediately respond to emails.

When it accused Mirach of forging the Bank of America letter underpinning the refinancing deal, Sahara did not explicitly say that deal talks with Mirach had ended, but Naphade said Sahara told the court there were no ongoing discussions.

THIRD PARTY

"The deal with Mirach is over, they (Sahara lawyers) said openly in the court," Naphade said. "Now it appears Sahara is proposing to bring (in) some third party."

Roy, who during his heyday socialized with presidents and film stars, is being held on $1.6 billion bail, the largest ever in India, reflecting the scale of the illegal bond scheme. The court has said investors need to be repaid as much as $7 billion including accrued interest.

In an email sent before the court proceedings on Wednesday to Sahara officials and some lawyers involved in the case, a copy of which was seen by Reuters, Sharma said the Supreme Court should allow it to buy the properties.

Sharma said the loan deal was no longer being pursued and that Mirach had decided to refund $2.6 million deposited by Sahara on Jan. 5 with Mirach for legal and accounting costs, to the Indian group.

Sahara had said in its statement last week that Mirach had received millions of rupees as "facility fee" for the loan transaction and that it would initiate civil and criminal proceedings against Mirach in India and the United States.

Sahara had asked the court to give it until Feb. 20 to close the refinancing deal with Mirach to raise the money for Roy's bail.

(Additional reporting by Suchitra Mohanty; Editing by Keith Weir and David Holmes)