SC nod for Sahara to re-mortgage foreign holdings

The Supreme Court on Friday cleared the way for the Sahara Group to raise $1.05 billion (some Rs6,562 crote) in fresh loans backed by its overseas hotels, helping it towards the Rs10,000 crore bail demanded by the Supreme Court for the bail of its chairman Subrata Roy.

The once-flamboyant Roy has been held in a New Delhi jail for more than 10 months over the group's failure to comply with a court order to refund billions of dollars to small investors, allegedly under dubious schemes.

The court gave its go-ahead to Sahara's plans to re-mortgage its hotels, but said the group would have to obtain necessary approvals from the Reserve Bank of India (RBI) and other authorities to comply with foreign exchange rules.

Ruling on Sahara's plea, the court also allowed Roy to continue using a makeshift office inside the jail premises, with facilities such as phones and computers, up to 20 Februrary (See: No bail, but wi-fi in jail for Sahara's Subrata to sell properties).

Sahara's three overseas properties, which include the Plaza hotel in New York and the Grosvenor House in London, are tied to a loan from Bank of China. Sahara wants to take over the existing loan and to refinance the properties to raise extra cash.

Sahara failed in its earlier attempt to sell the hotels, and Roy was sent back behind bars in early October after spending almost two months in the makeshift prison office (Sahara deliberately avoiding sale of properties, Sebi tells SC).

Sahara, which has interests in finance, real estate and media among its varied businesses, was formerly the main sponsor of the Indian cricket team. Roy has been often photographed with senior politicians, cricketers and Bollywood film stars.

While Sahara argues it has repaid most investors, the Supreme Court and the Securities & Exchange Board of India are unconvinced.