Sahara gets time till Feb to repay bond investors in two instalments
Dec 05 2012
The court on Wednesday asked Sahara to make an initial deposit of Rs 5,120 crore with the Securities and Exchange Board of India (Sebi) and pay the remainder in two instalments in January and February. Sahara has estimated the total payout to be about $7 billion including interest.
Unlisted Sahara, one of India’s biggest business groups and a household name through its sponsorship of the national cricket team, was ordered on August 31 to repay within 90 days sums raised by what the court called dubious means from nearly 30 million small investors, with 15 per cent interest a year.
The court had asked Sahara to deposit the amount with Sebi. It had also ordered Sahara to submit detailed documents with the regulator if it had refunded any money collected through the so-called optionally fully convertible debentures to investors.
The case was back in court after the regulator said Sahara had not complied with the order, while Sahara argued Sebi deliberately refused to accept documents and information submitted by it.
“You are in default. It seems that you have chosen not to pay the money,” the Supreme Court told Sahara on Wednesday, according to Gopal Subramaniam, a lawyer who represented Sahara in the case.
“Tell us whether you are ready to pay the amount or not. Don’t say sorry. Say I will deposit the amount,” the court told Sahara, according to the lawyer, as it gave extra time.
Sahara said in newspaper advertisements on Saturday it had cleared about Rs 33,000 crore raised through the bonds and had maximum outstanding liability of Rs 5,120 crore, which it was ready to deposit with the authorities.
Sebi issued advertisements in late October saying it had received complaints from investors that they were being forced by agents and officials of Sahara to switch the money held through the bonds to other investment products sold by the group.
Sahara had no immediate comment on the court ruling. The company, whose interests range from finance to real estate to sports, recently bought New York’s Plaza Hotel, and had earlier bought the Grosvenor House hotel in London.
Sahara, which has sought a review of the August order, said on Saturday its total group assets have a book value of $14 billion. The Supreme Court is yet to give its verdict on that review.