No Stay on Auction of Sahara Properties
SC decision comes even as group claims to have sold 2 NY Hotels
New Delhi: The Supreme Court declined to stay the auction of Sahara’s properties despite the group claiming to have sold its two New York hotels and that it would generate $1.67 billion against 26% equity in its Aamby Valley property in Pune to pay its dues to the Securities and Exchange Board of India (Sebi).
The auction notices are to be published globally on August14.
A three-judge bench comprising justices Dipak Misra, Ranjan Gogoi and AK Sikri rejected Sahara’s plea. Senior advocate Arvind P Datar appeared for Sebi, assisted by the regulator’s standing counsel Pratap Venugopal. Misra will become chief justice of India on August 28, succeeding JS Khehar.
Sahara, through senior advocate Kapil Sibal, said it would pay another ₹ 1,500 crore by the next court hearing set for September 11. “We have sold off the two New York hotels,” he said. He also claimed that the group was in the process of signing a temporary agreement infusing 26% equity into Aamby Valley from Mauritius-based Royal Partners Investment Fund.
He asked that the notices be de- Auction notices to be published globally ferred by a month to allow Sahara to wrap up a deal on Aamby Valley. The court had given its nod to mortgage Aamby Valley in 2014, he said. If the auction notices go through, no one will be interested in negotiating a deal, he said, adding that this would depress prices.
Sahara has estimated the value of Aamby Valley at ₹ 39,000 crore. Sibal said the company will deposit half the $1.67 billion it gets from the deal in the Sebi-Sahara account. That money, amounting to about ₹ 5,000 crore, will come in within four months, he said. Datar protested against the plea to defer or halt the auction notices, say- ing that Sahara always came up with an eleventh-hour proposal to stop the process. Money worth ₹ 4.5 crore has been paid and the ads are to be published on August 14 in newspapers globally, he said. “Let them execute the agreement. The auction notice will go on,” he said. He also cast doubt on the existence of the Mauritius company. “The ads have gone out. Money has been paid. The whole thing can’t be called off now.” The bench then said that it would not interfere with the auction process for now.
Justice Misra said the court may abandon the auction if at any point of time Sahara paid the remaining dues, of which the principal is ₹ 9,000 crore. Sahara has said it will pay ₹ 1,500 crore of this by September 11 and the rest in four months.
Seen in this light, the dismissal of its plea puts Sahara in an unenviable situation, some experts said. The company will now have to pay up the rest of the principal quickly or risk having Aamby Valley auctioned. Sibal protested against the court’s refusal to defer the auction notices, saying that he had never had the court reject any reasonable request made by him in his last 30 years of practice. Misra, however, shrugged off his remarks.