Ongoing tussle with Sebi could impact Sahara's properties abroad -Governance Now

Ongoing tussle with Sebi could impact Sahara's properties abroad

Following the attachment of bank accounts and properties of two Sahara companies and the group owner Subrata Roy by the markets watchdog in February, Bank of China is worried about the credit facility it plans to extend to the company against hotels the company owns in New York and London

GN Bureau | September 9, 2013

The crisis-ridden Sahara group of companies, which has been facing trouble from the markets watchdog Securities and Exchange Bureau of India (Sebi) over repayment of Rs 24,000 crore funds it “illegally” raised from public, is in talks with Bank of China to help retain its prized catch Grosvenor House in London.

According to a report in the Economic Times on Monday, Bank of China, which is amongst the top four state-owned commercial banks in the country, has a billion-dollar exposure against hotels which the Sahara group owns in London and New York out of which total credit given against Grosvenor, the iconic London hotel which Sahara acquired in 2010, alone is $476.83 million. The other hotels include Plaza and Dreams Downtown in New York.

Following the attachment of bank accounts and properties of two Sahara companies and the group owner Subrata Roy by the markets watchdog in February, the Chinese bank is worried about the credit facility it plans to extend to the company.

The Chinese bank has been writing to the Sahara group enquiring about its ongoing tussle in the supreme court with the markets watchdog to understand the underlying risk in the proposal. However, Sahara officials have clarified that revenues generated by the three hotels in question will be sufficient to service the bank’s debts.

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