The Supreme Court on Friday directed Sahara Group to seek prior clearance from Reserve Bank of India before borrowing a loan of $650 million from a foreign lender to secure release of its incarcerated Group Chairman Subrata Roy.
Faced with a stiff condition set by court to deposit Rs5,000 crore in cash and another Rs5,000 crore by way of bank guarantee after being faulted by SEBI in a debenture scheme, the Sahara Group had inked an agreement with Mirage Holdings llC, which agreed to loan $650 million to the Sahara Group's fully owned subsidiary — Amby Valley Mauritius and to invest $400 million into Sahara Hospitality limited, under which the group owns two famed international hotels in New York and Great Britain.
As the group approached the Supreme Court to clear this deal, both SEBI counsel Arvind Datar and amicus curiae Shekhar Naphade raised objection that being a transaction outside India, the money generated from it cannot be brought into the country as it would attract provisions under FEMA. The bench headed by Justice TS Thakur, directed Sahara to get approval from RBI within a week and directed RBI to act on the company's representation in two weeks. The Court allowed Roy to be lodged at the Tihar Jail conference hall to work out the deal by February 20, the deadline set by the foreign lender for the deal to come through.