Sebi accuses Sahara of stalling Aamby Valley auction, moves Supreme Court
The Sahara Group’s Aamby Valley city was put up for auction this August 14 keeping with the top court’s order for its sale to recover money owed to investors.india Updated: Oct 10, 2017 17:56 IST
Market regulator Securities and Exchange Board of India (Sebi) filed a contempt petition in the Supreme Court on Tuesday against Sahara Group chairman Subrata Roy and senior executives for allegedly obstructing the auction of the business conglomerate’s Aamby Valley project near Pune.
The petition alleges that the Aamby Valley “had adopted subterfuge methods to avoid auction of the property”. Also, it accuses the company of declaring “a lockout” of the commercial premises six days ahead of the proposed auction.
The Sahara Group’s Aamby Valley city was put up for auction this August 14 keeping with the top court’s order for its sale to recover money owed to investors.
The reserve price was fixed at Rs 37,392 crore for the property straddling the lush Sahyadri mountain range close to Lonavala, a popular hill station near Pune.
“We mentioned the matter before a bench headed by Justice Ranjan Gogoi seeking an early hearing. Auction proceedings of Aamby Valley were to take place on October 3, but that didn’t happen as the premises were taken over by police after the company declared a lockdown,” said Pratap Venugopal, the lawyer for Sebi.
The petition says a representative of Aamby Valley Private Limited wrote on September 28 to police, the official liquidator of Bombay high Court and Maharashtra’s additional chief secretary of home, informing that the company has seized operation because of lack of funds.
The letter also said the company cannot guarantee security to the international school in Aamby Valley and police should take over.
The latest developments affected the auction process as it drove the bidders out and nobody is willing to buy Aamby Valley now, the Sebi said.
The high court-appointed liquidator had invited bids in August.
“The ultra-exclusive chartered city has residential options ranging from 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,” the liquidator’s notice said.
Other than the 6,761.64-acre Aamby Valley city, a 1,409.87-acre plot surrounding the project and another 321.66 acres in adjoining Satara district were to be auctioned.
Sahara chief Roy had sought permission for an agreement with Victor Koenig UK Limited for an investment of US $1.67 billion in Aamby Valley. The court allowed Sahara to begin negotiations but refused to put the auction on hold.
The auction is the fallout of the court’s April 27 order that found the Sahara Group guilty of contempt in a dispute with Sebi.
The company was ordered to refund millions of small investors who put their money in two schemes that were declared illegal by the market regulator.
The company paid a little more than Rs 11,000 crore and took time till July 2019 to deposit the remaining Rs 14,779 crore with Sebi.
- Sept 19 - 20, 2017: Physical inspection of properties to intending bidder
- Sept 21 - Oct 3, 2017: Bids to be received in sealed cover by the official liquidator along with 15% EMD vide NEFT/RTGS
- Oct 10 - 11, 2017: Auction Sale at auction venue