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Under-fire Sahara says sports properties safe

cricket Updated: Apr 02, 2013 02:15 IST
HT Correspondent
HT Correspondent
Hindustan Times
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The Subrata Roy-led Sahara Group, beleaguered by Supreme Court pressures and a probe into the funds involving its depositors, says its prized sporting possessions covering cricket, hockey and Formula 1 teams will be unaffected by the regulatory assault it is facing.

The Sahara group owns the Pune Warriors India IPL team, is the India cricket team sponsor, is the principal sponsor of the national hockey team and also partly owns the Sahara Force India F1 team.

The Securities Exchange Board of India (SEBI) last week said it would sell assets of two Sahara group companies if the conglomerate’s chief Subrata Roy and three other top executives fail to appear personally before it on April 10 after furnishing details of their assets and bank accounts.

Court directive
SEBI, the stock market watchdog, will seek the sale of properties across the country ranging from the posh Aamby Valley near Pune to land in Mumbai, Delhi and Gurgaon if Roy and three directors — Vandana Bhargava, Ravi Shanker Dubey and Ashok Roy Choudhary —fail to appear.

Properties of Sahara Housing Investment Corporation Ltd (SHICL) and Sahara India Real Estate Corporation Ltd (SIRECL) and the companies' executives, as well as liquid assets were ordered to be attached in February after SEBI said the Sahara group had defaulted on two payments to investors.

Last month, SEBI moved the Supreme Court seeking permission to arrest Roy. The company said these orders will not affect the sports properties.


“The SEBI Order does not direct attachment of bank accounts and/or assets of Sahara group entities having sponsorship contracts with BCCI and India’s hockey team. The said entities are free to make payments and carry on their business. In fact, after the SEBI order, BCCI has been paid as per contractual obligation towards the sponsorship for the Indian cricket team,” the company said in a statement emailed to HT.

The company said it has not sought any deferred payment schedule from the cricket board, with whom it had inked a sponsorship deal worth around Rs.3.34 crore per match in May, 2010.

Ajay Shirke, the BCCI treasurer, said: “We have spoken to Sahara after the SEBI order freezing bank accounts and attachment of properties of the two Sahara companies last month. We don't want to get into those issues as we are receiving contractual payments on time.”

The Group, which won a bid for IPL's Pune franchise in 2010 for $370 million, said SEBI’s orders will not affect payments, including players’ salaries, related to Pune Warriors.

“The SEBI order does not direct attachment of bank accounts and/or assets of the franchisee entity owning the Pune Warriors Team. Consequently, there is no embargo on such payments and therefore no hindrance in discharging our obligations," it said in the statement.

Sahara catapulted into limelight in the 1990s with a series of finance schemes for small investors but hit the headlines for all the wrong reasons last August when the Supreme Court said that schemes run by SHICL and SIRECL were illegal.

The apex court ruled that the group must repay as much as R24,000 crore to millions of investors — an eye-watering figure almost equal to India's elementary universal education budget.

In instalments
In December, the group was allowed to pay the money in three instalments, with an immediate payment of Rs.5,120 crore to be followed by a tranche of Rs.10,000 crore in the first week of January and the rest by the first week of February.

Last month, SEBI ordered the freezing of bank accounts and attachment of properties of the two Sahara companies and those of their top executives for failing to comply with the court's orders.

The regulator had said the January and February instalments were not paid.

Roy has challenged the attachment orders before the Securities Appellate Tribunal (SAT) and the matter is scheduled for hearing on April 13.

“The SEBI Order has been challenged by SIRECL, SHICL and their Directors and Subrata Roy Sahara by filing appeals before Securities Appellate Tribunal (SAT) on the ground that the same are illegal, bad in law, beyond SEBI's power and jurisdiction. The appeals are pending,” the statement said.