Tough decisions as endgame nears for Indian conglomerate Sahara

Sun Mar 22, 2015 10:54pm EDT
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By Sumeet Chatterjee

MUMBAI (Reuters) - India's highest court will decide the future of conglomerate Sahara later on Monday, when it rules on whether time has run out for the controversial business empire to raise the $1.6 billion it needs to free its jailed chief.

The Supreme Court last week gave Sahara, a sprawling conglomerate that ranges from property to Formula One motor racing, a final chance to raise funds against its assets in order to bail out its founder, Subrata Roy.

If it fails to raise the cash, the court could appoint a receiver to auction its assets, which include properties such as New York's Plaza hotel and tracts of land in India. This could prove a challenge as industry analysts say a fire sale may not raise enough to free Roy and get Sahara back on its feet.

"If you ask people if this is the best time to sell high value assets in the country, the majority of them would say no," said Sanjay Dutt, head of property consultant Cushman and Wakefield in India. "With this kind of investment, somebody has to be very ambitious in every sense of the word."

Sahara did not immediately respond to a request for comment.

Roy describes himself as guardian of the world's largest family and calls himself "managing worker". Without him, several employees said operations across the group had been hit over the past year. Roy is not only the face of Sahara, but he also single-handedly controls an operation spread across dozens of tiny subsidiaries in India, Mauritius and Britain, several employees said.

Sahara has made several, failed attempts to raise the money to free Roy on bail. He has been held in jail for more than a year after regulators said Sahara failed to comply with a court order to refund billions of dollars to investors in a bond program that was ruled illegal.

Sahara has said it has paid most of the dues to the bondholders. India's markets regulator, which is seeking redress for millions of investors, disputes that.   Continued...

Sahara Group Chairman Subrata Roy gestures as he arrives at the Securities and Exchange Board of India (SEBI) headquarters in Mumbai in this April 10, 2013 file photo.  REUTERS/Danish Siddiqui/Files