Exclusive: India's Sahara uses small savers to keep hill resort afloat

Sat Jan 30, 2016 7:04pm EST
 
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By Sumeet Chatterjee

MUMBAI (Reuters) - India's embattled Sahara conglomerate has been funneling cash from small savers to fund one of its biggest projects, a luxury resort south of Mumbai, according to documents Reuters reviewed.

Sahara has ploughed at least 15 billion Indian rupees ($221 million) from two of its credit cooperatives into the Aamby Valley resort project through investments in preference shares, according to documents filed with India's companies regulator.

It is doing so as some investors in its credit cooperatives complain they have struggled to get Sahara to pay out their matured time deposits - even for sums as low as 30,000 rupees ($448.83)..

The credit cooperatives investments into Aamby Valley are not illegal. Cooperatives are allowed to invest in shares and bonds of infrastructure and real estate companies after board approval, if they are in the interest of the cooperatives, according to the law under which these cooperatives operate.

Responding to Reuters queries, a spokesman for Sahara Credit Cooperative Society Ltd. said in an emailed statement that "all required approvals" were in place and the investments would not put investors at risk. He did not elaborate.

Sahara Credit Cooperative had shares worth 10.39 billion rupees in Aamby Valley, according to Aamby Valley's 2014 annual report.

Saharayn E-Multipurpose Society Ltd, which had shares worth 4.6 billion rupees in the resort, did not respond to requests for comment.

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An electronic billboard advertising Sahara Group is seen on top of a building at a residential area in Mumbai, India, in this March 15, 2013 file photo. To match INDIA-SAHARA/     REUTERS/Danish Siddiqui/Files