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Sahara case: Rs 37,392 cr auction of Aamby Valley on 10, 11 Oct: Only two potential bidders in the fray.

Aamby Valley, public auction, official liquidator, Sahara group, Supreme Court, Subrata Roy, SEBI, Ravi Shankar Dubey , Ashok Roy Choudhary,
Image courtesy: Quartz

 

The Bombay High Court put up Aamby Valley for a public auction in August to recover the dues the Subrata Roy-promoted group owes to various lenders. The official liquidator has set a reserve price of Rs 37,392 crore for the property. However, Sahara group believes the market valuation of Aamby Valley is Rs 1 lakh crore.

The official liquidator of the Bombay High Court published an auction notice last month inviting prospective bidders for the integrated hill city township spread over 6,761.6 acres near Lonavala in Pune district, as also two land parcels measuring over 1,700 acres.

There are several steps before the final auction takes place in Mumbai. After the submission of the KYC documents, the bidders can make a physical inspection of the assets to be auctioned till September 20. Thereafter, bids would be submitted in a sealed cover with 15 percent earnest money deposit with the official liquidator till October 3.

The auction has been scheduled for October 10-11, while the top three highest bidders would be initiated by email by October 17. The successful bidder would need to deposit 50 percent of the bid amount by November 17 and further 25 percent by December 16 and then the final 25 percent by January 16.

If the successful bidder fails to make the payment, the property would be offered to the next highest bidder with a similar payment structure spread over three months.

Meanwhile, only two potential bidders are believed to have shown initial interest for embattled Sahara group’s super luxurious Amby Valley.

While there is no official word as yet on the identity of the potential bidders as the entire exercise is being carried out under strict observation of the apex court and the observers appointed by it, two interested parties have turned up and have submitted their (Know Your Clients) KYC details as required for the initial steps of the auction process.

They refused to be identified and also declined to disclose the names of the potential bidders as the process has just got underway and involves strict confidentiality requirements, but said the two parties appear to be representatives of two separate consortia of investors and corporates.

Sahara case Rs 37,392 cr auction of Aamby Valley on 10, 11 Oct Only two potential bidders in the fray.

Image courtesy: News 24

About the resort town, the liquidator said: “The ultra-exclusive chartered city has residential options ranging from the timber chalets to fabulously modern and customised villas in distinct architectural styles and several amenities such as golf course, airport, hospital, adventure sports, retail, entertainment, international school, and hospitality”.

It also said the properties being auctioned will be sold /leased along with all subsisting licenses, consents, permissions, registrations, approvals, grants and pending applications (as applicable) as per the Supreme Court order of July 25, 2017.

The Supreme Court on 11 September, however, refused to stay Aamby Valley auction, even as the group said Royale Partners Investment Fund has agreed to provide a loan of US $1.6 billion (over Rs 10,000 crore) against the security of 26 percent shares of its Aamby Valley project.

The Supreme Court directed the official liquidator to go ahead with the scheduled auction of Aamby Valley property in Maharashtra, as it rejected Sahara Group Chief Subrata Roy’s plea for some more time.

The directions came after Roy said he had deposited Rs 533.20 crore in the Sebi-Sahara account and wanted to pay the remaining Rs 966.80 crore through cheques dated 11 November.

The court had on July 25 asked the embattled Sahara chief to deposit Rs1,500 crore in the Sebi-Sahara account by 7 September and said it may only then deliberate upon his plea seeking 18 months more for making the full repayment of the outstanding amount to be refunded to the investors.

Sahara has been engaged in a long-running battle with capital market regulator the Securities and Exchange Board of India over funds gathered from small investors on allegedly unreal promises. Sahara – SEBI case is the case of the issuance of Optionally Fully Convertable Debentures issued by the two companies of  Sahara India Pariwar to which  Securities and Exchange Board of India had claimed its jurisdiction and objected on why Sahara has not taken permission from it.

Sahara has claimed that the said bonds are hybrid product, thus does not come under the jurisdiction of SEBI, instead is governed by Registrar of Companies (ROC) under Ministry of Corporate Affairs, from which the two companies of Sahara has already taken permission and submitted the red herring prospectus with ROC before issuing the bonds.

SEBI in return ordered Sahara’s two companies to stop issuing the said bonds and return monies to investors. Sahara contested the case in various courts which eventually came to Supreme Court of India.

On 26 February 2014, Supreme Court of India ordered the arrest of Subrata Roy, Chairman, and Founder of Sahara India Pariwar. for failing to appear in court in connection with the Rs. 24,000 crore deposits his company failed to refund to its investors as per a Supreme Court order.  He was eventually arrested on 28 February 2014 by Uttar Pradesh police on a Supreme Court warrant.

In a statement after the arrest, his lawyer said Subrata’s 92-year-old mother was in poor health and needed her eldest son by her side, and hence he failed to appear at the court. He was granted interim bail by the Supreme Court on 26 March 2014 on the condition that he would deposit Rs 10,000 crore with SEBI. Subrata was eventually taken into judicial custody and sent to Tihar Jail, along with two other Sahara directors, on 4 March 2014 for failing to deposit Rs 10,000 crore with SEBI.

In Tihar jail, Subrata unsuccessfully tried to sell some of his hotel properties to raise Rs 10,000 crore for his bail bond.He remained in Tihar jail for more than two years and was released on parole in May 2016 to attend the last rites of his deceased mother. The Supreme Court bench of Justice Radhakrishnan and Justice Khehar ruled in favor of Sebi and orders the two Sahara companies to return to its OFCD investors the full outstanding amount of over Rs 20,000 crore, along with 15 percent interest, within three months.

Besides Roy, two other directors Ravi Shankar Dubey and Ashok Roy Choudhary were arrested for failure of the group’s two companies to comply with the court’s August 31, 2012, order to return Rs 24,000 crore to their investors.

Having spent two years in jail, Roy has been on parole since May 6 last year. He was granted parole for the first time to enable him to attend the funeral of his mother. It has been extended since then.

Subrata Roy is the founder and chairman of the  Sahara India, an Indian conglomerate with diversified businesses and ownership interests that include London’s Grosvenor House, New York’s Plaza Hotel, Aamby Valley City and Force India. Roy founded the company in 1978.


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