SC allows Sahara to proceed with foreign loan transactions

New Delhi: The Supreme Court on Friday allowed Sahara Group to go ahead with its proposed transactions for a loan of around $1,050 million from abroad for raising Rs 10,000 crores to ensure release of Subrata Roy from jail. 

However, the apex court put conditions including the approval of RBI for the transfer to India the funds raised in the US to meet the requirement set for release of Roy, who is lodged in Tihar jail for over nine months for non-refund of over Rs 20,000 crore with interest to depositors. 

The apex court, which had asked 65-year-old Roy to pay Rs 10,000 crore to get bail, out of which Rs 5,000 crore should be paid in cash and rest in bank guarantee, today extended its August 1 order for conference facility for him in Tihar jail to deal with the nitty-gritty of transaction till February 20. 

A Bench headed by Justice T S Thakur passed the order after market regulator SEBI and senior advocate Shekhar Naphade, who is assisting the court as an amicus curiae, agreed with the plea of Sahara that “there was no risk for the court in allowing the transaction for the loan”. 

“In the circumstances and keeping in view the submissions of counsel for SEBI and amicus curiae and other safeguards, there is no reason why we do not allow the prayers,” the bench, also comprising Justices A R Dave and A K Sikri, said while making it clear that permission for transaction of loans would be subject to certain conditions. 

The bench said Sahara will move the Reserve Bank of India (RBI) at appropriate level or before its competent authority and make representation for suitable clarification for bringing the amount arranged in the US and deposit it in the account of Aamby Valley Ltd, Mauritius, a fully owned subsidiary of Sahara India’s Aamby Valley Ltd. 

Further, the bench said the entire loan amount generated from the US shall be deposited with Aamby Valley Ltd, Mauritius and shall not be utilised or transferred by the Indian subsidiary, for any other purpose except for being deposited with SEBI in the SEBI-Sahara refund account. 

Thirdly, the bench made it clear that Sahara will not be free to claim any equity on the amount raised as loan from overseas and deposited with Aamby Valley Ltd, Mauritius, for the purpose of bailing out Roy from jail. 

Out of the amount of $1050 million, Sahara has been allowed to raise a junior loan of $650 million and $400 million in investment from Mirage Capital Llc. 

The submissions in this regard was made by Sahara’s counsel S Ganesh, Rajiv Dhavan and Keshav Mohan. They had submitted that Sahara be allowed for taking over of the Bank of China loan on foreign Hotels by another creditor.