| NEW DELHI/MUMBAI, March 5
NEW DELHI/MUMBAI, March 5 With its jet-setting
boss in jail, India's Sahara conglomerate is scrambling for a
way to satisfy a court order to repay billions of dollars in an
outlawed bond scheme.
India's highest court on Tuesday ordered that Subrata Roy,
65, remain in custody until a March 11 hearing, a dramatic turn
for a man accustomed to hobnobbing with sports stars, Bollywood
actors and politicians. The court said it is open to an earlier
hearing if Sahara has a satisfactory payment plan.
Roy is being held in a cell at Tihar jail, India's largest,
with two other Sahara directors.
"We are now considering what we can do," Satish
Kishanchandani, a lawyer representing Sahara told Reuters,
declining to give further details. "It was urgent even before
and it is urgent even today to find a solution."
Jail spokesman Sunil Gupta said Roy was receiving the same
treatment as other inmates, the only privilege being that he
gets a bed as he is over 60 years of age. "He slept well. He had
his breakfast today," Gupta said on Wednesday.
Sahara is best known as the former main sponsor of India's
national cricket team, as well as owner of New York's Plaza
Hotel and London's Grosvenor House. It has a net worth of $11
billion and more than 36,000 acres of real estate, according to
its website. It also co-owns the Sahara Force India Formula One
auto racing team with liquor baron Vijay Mallya.
Still, Roy and unlisted Sahara have long been figures of
mystery, operating outside the Indian corporate mainstream.
In court on Tuesday, Sahara lawyers offered to give bank
guarantees for 225 billion rupees ($3.63 billion) within three
to six months, but the court rejected the proposal and asked
Sahara to come up with a "concrete" plan, according to two
lawyers who were at the hearing.
Sahara also proposed that the Securities and Exchange Board
of India (SEBI) begin selling Sahara properties to which it
holds title until it comes up with the bank guarantee. SEBI has
argued that it does not have the needed paperwork for some
Sahara properties and disputed the valuation of some of them.
SEBI had brought contempt proceedings against Roy and Sahara
for failure to comply with a 2012 Supreme Court order to repay
billions of dollars to investors. Sahara has said it repaid most
investors and that its remaining liability was less than the
51.2 billion rupees it deposited with SEBI.
SEBI declined to comment on Wednesday.
A source at the regulator said it would consider taking
steps to seize some of Sahara's foreign assets, although it had
not yet begun to do so.
"As of now we have attached some of their domestic assets
but we are waiting for directions from the court before
proceeding with any auction," said a SEBI official involved in
the matter, who declined to be identified.
"The original court order did not distinguish between their
Indian and foreign assets, so I don't see any reason for us to
not go for the international assets," the official said.
In India, Sahara's highest-profile assets include the Aamby
Valley City resort in Maharashtra state and the Sahara Star
hotel near Mumbai's airport.
In a strongly worded order following the hearing, the
two-judge panel at the Supreme Court expressed frustration over
Sahara's failure to comply with its orders to repay money in the
bond case and cast doubt on the veracity of documents submitted
by Sahara that show it has repaid investors.
"All the fact finding authorities have opined that the
majority of investors do not exist," the court said in its
There has not been a public clamour by Sahara investors
Roy's trip to jail late on Tuesday capped a dramatic week.
Last Wednesday, the court issued an arrest warrant for Roy
after he missed a hearing in the contempt proceeding. Roy said
he was unable to be present as he was attending to his ailing
On Thursday, police looking to arrest Roy couldn't find him
at his sprawling gated compound in the northern city of Lucknow,
although his mother was there. The next day, Roy said he was not
"absconding" and turned himself in to police.
After being held at a government guest house in a forested
picnic spot on the outskirts of Lucknow, Roy was driven the
roughly 500 km (310 miles) to New Delhi, where on Tuesday a man
outside the court threw ink on his face. The man was pummelled
by members of the crowd and taken away by police.
Following the hearing, Sahara sent an invitation for an
"urgent" press briefing at the home of its lawyer Ram
Jethmalani, 90, a member of parliament and one of India's
highest-profile lawyers. Jethmalani's staff appeared to be
caught off guard when the media arrived, and the briefing did
not take place.
Tuesday's order by the court showed it had lost patience
with Sahara, legal observers said.
"The whole intention now is to tell them that we are fed up
of all your gimmickry, now be serious and tell us how you are
going to go about it, otherwise jail is your place," said S.D.
Israni, a Mumbai lawyer who is not involved in the case.
($1 = 61.9450 Indian rupees)
(Additional reporting by Suchitra Mohanty in NEW DELHI; Writing
and additional reporting by Tony Munroe; Editing by Jeremy