Sahara’s Aamby Valley to be auctioned in June

The official liquidator appointed for the assessment and auction of Aamby Valley properties has submitted its report to the market regulator, Securities and Exchange Board of India (Sebi) and would start the auction of the properties in June, said two people familiar with the developments.

“Official liquidator of the Bombay High Court has submitted its report on Aamby to Sebi. The value of the property has been estimated at ₹35,000 crore. However, the market value of the property is greater. Auction may begin in second week of June,” said the first person.

An email sent to Sebi was not answered. The property may be sold in smaller parcels as it would be difficult to sell the entire 4,000 hectares to a single buyer. Sahara had expressed reservation on this sale and had said that “The market valuation of Aamby Valley is over ₹1 lakh crore so auctioning under distress will be an undue benefit for any bidder.”

Aamby Valley is Sahara’s flagship project, consisting of luxury resorts, man-made lakes and an airport. It is spread over 4,000 hectares. In January 2012, Sahara valued the property at ₹34,000 crore. The Supreme Court on April 17 had ordered for auction of the property after the Sahara India chief Subrata Roy failed to deposit ₹5,092.64 crore with the capital markets regula- tor. The case relates to two Sahara group firms—Sahara India Real Estate Corp (SIRECL) and Sahara Housing Invest Corporation (SHICL)—which had raised over ₹24,029 crore from 29.6 million investors.

Sebi found this to be in violation of its public issue norms and ordered a refund in 2011. The order was upheld by the Supreme Court in 2012. Sebi says the total dues, with interest, exceed ₹47,000 crore. Of this, the group has remitted ₹11,477 crore as of March 2017.

As per Sebi’s latest annual report so far ₹63 lakh of the funds raised by Sahara, have been claimed by bond holders.

Sebi has spent close to ₹30 crore so far in expenses on account of handling the Sahara matter which includes legal expenses, warehousing of documents and so forth. Out of the expenses incurred Sebi has been able to realise ₹2.86 crore so far from the interest earned on the Sahara deposit.

The property or funds realised after auction has two suitors, the income tax department and Sebi.

A report in Times of India on April 25 said the income tax department has asked Sahara’s Aamby Valley Ltd (AVL) to pay tax and penalty of ₹24,646 crore after the department added over ₹48,000 crore to its income for assessment year 2012-13.

“In such a scenario the first right to the assets or funds realised post sale of these assets vests with the government that is the income tax department,” said Vijay Pal Dalmia, senior litigator and Partner Vaish Associates.

“To amicably settle dues the two parties—income tax dept and Sebi—may ask the Supreme Court to provide guidance,” said the second person.

“In a scenario if the apex court rules in favour of Sebi to have the first right on the funds realised post the auction, then the income tax department can move an application for the settlement of its dues,” said Dalmia.