The Supreme Court has given troubled conglomerate Sahara a month’s time to explain why a receiver should not be appointed to auction off its properties to refund investors in its illegal bonds, a lawyer for Sebi on Monday.
Sahara is a household name in India as the former main sponsor of the national cricket team. It also has major hotels overseas, including the Plaza in New York and the Grosvenor House in London.
Sahara founder Subrata Roy was arrested in March last year after the company failed to comply with a court order to refund money raised from millions of small investors by selling them bonds later ruled to be illegal.
In June, the court gave the group 18 months to pay the entire sum of 5.7 billion dollar it says Sahara owes the investors. Sahara has previously said it had repaid 95% of its liability, which has not been accepted by the court. The group has been trying to raise funds since Roy’s arrest, but has failed in several of its bids in the past year to raise the money against its hotels and some other properties in India.
Last month, the court had asked Sebi, which is seeking redress for the bond investors, to submit an application for the appointment of a receiver for the property auction. On Monday, the Supreme Court gave Sahara a month’s time to respond to its show cause notice, after which SEBI will get two weeks to file a rejoinder, the lawyer told reporters after the court hearing.
Sahara did not immediately respond to a request for comment, but a lawyer for the group confirmed the court order.