Aamby Valley auction process begins at Rs 37,000 cr reserve price: Here's all you need to know about Sebi-Sahara case

Three days after a Supreme Court directive, the Bombay High Court on Monday put up the beleaguered Sahara Group’s prestigious Aamby Valley city in Lonavala for a public auction even as a Mauritius-based fund seems to have evinced interest in investing the project. [caption id=“attachment_3201830” align=“alignleft” width=“380”]  Sahara Group Chairman Subrata Roy. Reuters[/caption] The Official Liquidator for the Aamby Valley city – considered the jewel in the crown of the Sahara Group – has put up a reserve price of Rs 37,392 crore. The Sahara group pegs the market valuation of this project at over Rs 1 lakh crore. Below are the key details of the Sahara-Sebi issue:

1. The Supreme Court bench comprising of justices Dipak Misra, Ranjan Gogoi and A K Sikri said the group had failed to honour the 21 March order, which asked it to deposit Rs 5,000 crore by 17 April
2. The SC appointed the official liquidator of Bombay High Court and said it must complete the exercise of valuation over the next ten days, and submit a report to the apex court. “We are sure all shall work in harmony to comply with the directions passed by this court”, the report said
3. The bench also directed Roy and his group as well as Sebi to provide all necessary details relating to the properties to the official liquidator within 48 hours
4. The Court also directed its chief Subrata Roy to personally appear before it on 28 April, 2017
5. Subrata Roy was first arrested in 4 March, 2014 after Sahara, a household name in India, failed to comply with a court order to refund 36,000 crore raised from millions of small investors by selling them bonds later ruled to be illegal. The then 65-year-old Roy was asked to refund the money to the Sebi (Securities and Exchange Board of India within 18 months), in nine instalments from the date of release
6. Besides Roy, two other directors, Ravi Shankar Dubey and Ashok Roy Choudhary, were also arrested for the failure of two group companies, Sahara India Real Estate Corporation (SIRECL) and Sahara Housing Investment Corp Ltd (SHICL), to comply with the court’s 31 August, 2012 order to return Rs 24,000 crore to their investors. Another director Vandana Bhargava was not taken into custody
7. Sahara has been trying to raise funds since Roy’s arrest by selling real estate assets but has failed in several past bids
8. Sahara, the former main sponsor of India’s national cricket team, has some prized assets, including New York’s Plaza Hotel, the Grosvenor House in London, Sahara Star hotel in Mumbai, Aambi Valley luxury resort in the hills of western India and a stake in a Formula One racing team
9. The group claims that it has already paid Rs 22,000 crore to investors, and the additional Rs 12,000 crore it deposited pertains to duplication of payments
10. In March 2016, the court asked Sebi, to submit a plan for selling Sahara’s 86 properties in the country excluding its overseas assets, Sahara Star hotel in Mumbai and Aamby Valley The SC on 6 May, 2016 granted Roy four-week parole to attend his mother’s funeral. His parole has been extended by the court ever since
11. The court had on 28 November last year asked Roy to deposit Rs 600 crore more by 6 February in the refund account to remain out of jail and warned that failure to do so would result in his return to prison
12. Irked over non-submission of money, the Supreme Court had on 17 April, 2017 decided to sell property worth Rs 34,000 crore belonging to the Sahara group in Maharashtra’s Aamby Valley and had sought Roy’s presence before it
13. The SC granted Roy 10 more working days to deposit Rs 709.82 crore out of the promised Rs 1,500 crore and extended its interim order granting him bail till 5 July, 2107
14. In 2012, Sahara group had told the court that the Aamby Valley property was worth Rs 39,000 crore, but in a statement in April 2017, claimed the township was valued above Rs 1 lakh crore, and any attempt to sell the assets could result in a distress sale. “Sahara is committed to making the payment of Rs 10,000-crore-plus by July/August 2017 but the Hon’ble court is instead asking for the auction of Aamby Valley. Since the last hearing, the court is insisting on the auction. The market valuation of Aamby Valley is above Rs 1 lakh crore. Auctioning under distress will give the bidder undue favour/benefit,” The Business Standard report said quoting Sahara lawyer Gautam Awasthi in an email
15. Sahara’s business plan focused on “developing 88 integrated townships under the Sahara City Homes” brand and 15 residential complexes under the “Sahara Grace” name across 99 cities
16. The court had last month ordered an international real estate firm, which had shown willingness to buy Sahara’s stake in New York-based Plaza Hotel for $550 million, to deposit Rs 750 crore in the Sebi-Sahara refund account, instead of the apex court registry to show its bonafides

(With inputs from agencies)