No Stay on Auc­tion of Sa­hara Prop­er­ties

SC de­ci­sion comes even as group claims to have sold 2 NY Ho­tels

The Economic Times - - Companies: Pursuit Of Profit - Sa­man­waya.Rau­tray @times­ Sale Life­line?

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.

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