SC orders Sahara to refund Rs. 24,400 crore

Supreme Court on Friday held that the economic offences
committed by Saharas must be dealt with by an iron hand
and directed the Sahara India Real Estate Corporation Ltd.
(SIRECL) and the Sahara Housing Investment Corporation Ltd.
(SHICL) to refund over Rs. 24,400 crore collected
from 2.21 crore depositors. File photo

The sum, along with 15% interest, should be deposited in a bank in three months

The Supreme Court on Friday held that the economic offences committed by Saharas must be dealt with by an iron hand and directed the Sahara India Real Estate Corporation Ltd. (SIRECL) and the Sahara Housing Investment Corporation Ltd. (SHICL) to refund over Rs. 24,400 crore collected from 2.21 crore depositors.

The sum was collected through the optimally fully convertible debentures (OFCDs) by way of bonds.

A Bench of Justices K.S. Radhakrishnan and J.S. Khehar said they should refund the amounts collected through Red Herring Prospectus (RHPs) dated March 13, 2008 (Rs. 17,400 crore) and October 16, 2009 (over Rs. 7,000 crore), along with 15 per cent interest to the Securities and Exchange Board of India (SEBI) from the date of receipt of the subscription amount till the date of repayment, within three months.

The sum should be deposited in a nationalised bank bearing the maximum rate of interest.

The Bench directed the Saharas to give details, with supporting documents, to establish whether they had refunded any amount to persons who had subscribed through the RHPs within 10 days, and “it is for the SEBI (WTM) to examine the correctness of the details furnished.”

“We make it clear that if the documents produced by Saharas are not found genuine or acceptable … the SEBI (WTM) will proceed as if Saharas had not refunded any amount to the real and genuine subscribers who had invested money through [the] RHPs,” it said.

The court appointed the retired Supreme Court judge, B.N. Agrawal, “to oversee whether directions issued by this court are properly and effectively complied with by the SEBI (WTM) from the date of this order. Mr. Justice B.N. Agarwal would also oversee the entire steps adopted by the SEBI (WTM) and other officials for the effective and proper implementation of the directions issued by this court.”

In a separate judgment, Justice Khehar said: “It seems the two companies collected money from investors without any sense of responsibility to maintain records pertaining to funds received. It is not easy to overlook that the financial transactions under reference are not akin to transactions of a street hawker or a cigarette retail made from a wooden cabin. The present controversy involves contributions which approximate Rs. 40,000 crore, allegedly collected from the poor rural inhabitants of India. Despite restraint, one is compelled to record that the whole affair seems to be doubtful, dubious and questionable. Money transactions are not expected to be casual, certainly not in the manner expressed by the two companies.”

The Bench directed the Saharas to furnish the SEBI, in 10 days, with all documents, especially the application forms submitted by subscribers, the approval and allotment of bonds, to enable it to ascertain the genuineness of the subscribers as well as the amounts deposited.

Source: www.thehindu.com

Sahara buys controlling stake in New York's Plaza Hotel

New York: Sahara Group has agreed buy a controlling stake in the city's iconic Plaza Hotel for USD 570 million from the Israeli-owned real estate company Elad Properties.

Israeli businessman Yitzhak Tshuva, who controls the Elad Group, has sold his 60 percent stake in the Plaza Hotel, a report in the Israeli daily newspaper Haaretz said.

The Elad Group, which is Tshuva's private real estate arm in North America, signed the deal on Monday to sell its share in the hotel and commercial center to Subroto Roy-led Sahara Group for USD 570 million, it added.

Tshuva had bought the 105-year-old Plaza in 2004 from a group of investors headed by Saudi prince Alwaleed bin Talal for USD 675 million, the newspaper said.

He invested a total of a billion dollars in the renovation of the Plaza, which has 182 luxury apartments, a hotel, condominiums and commercial space.

Elad would see a free cash flow of USD 220 million from the deal, which will help it pay off the more than USD 500 million it owes to bondholders in Israel as well as allowing it to make new investments.

The hotel, which overlooks New York's Central Park, is jointly owned by Elad Properties and Saudi-based Kingdom Holdings.

Elad would receive 1.6 billion shekels for its 60 percent stake, while Kingdom will receive the rest.

Kingdom, the investment vehicle owned by Talal, will hold a 25 percent stake in the hotel once the deal is complete.

Udi Erez, the chief executive of the Elad Group and the chairman of Elad Canada, had said in an interview to the New York Times early last month that the group was close to sealing a deal with Sahara for the Plaza Hotel.

He had said the deal will be valued at about USD 575 million dollars.

Erez had said it was his recommendation to sell Elad's stake in the Plaza since the return on investment for the hotel and the condo hotel was low.

"It's fine to sit on a property like that. And I'm sure it's going only one way ? up ? because of the hotel, the location, the name and the history. But still for me we're going to have more than USD 200 million net cash flow from this deal. We can use that money in this economy," he had said in the interview.

Source: zeenews.india.com