Sahara chief Subrata Roy back in jail cell, hotel deal uncertain

Roy is back in a cell after living in a makeshift prison office for two months

New Delhi: Subrata Roy, the jailed head of Sahara conglomerate, is back in a cell after living in a makeshift prison office for two months while working on the sale of three luxury hotels in New York and London, a deal that is still hanging.

The Supreme Court had allowed the tycoon to use an office, phone, Internet connection and three secretaries in the Delhi prison to facilitate the sale of three hotels including Grosvenor House in London and the Plaza in New York.

Roy needs to raise 100 billion rupees ($1.6 billion) from the hotel sales to have a chance of obtaining release on bail.

He has been moved back to a cell after a court-imposed deadline for the use of the office expired, although the businessman had requested more time, Tihar Jail spokesman Mukesh Prasad said.

"He was asking officials. We told him we don't have the power to extend those facilities," the spokesman said.

Roy was jailed for contempt of court in March amid a long-running dispute with India's capital markets watchdog over Sahara's failure to repay billions of dollars to investors who were sold outlawed bonds.

A source close to the company said Roy did not have enough time to complete the sale.

"Any negotiation of big-ticket items takes time, out of which maximum time gets spent on conducting due diligence and working out the current valuations," the source said.

"Roy and his team are working hard and trying their best even in wake of the current restrictions that Roy is in now," he said.

A Sahara spokesman declined to comment.

Sahara has said it is in talks with multiple potential buyers but has refrained from naming any suitors.

In August, the Wall Street Journal's online edition reported that the Sultan of Brunei had made a $2 billion bid for the hotels, but a spokesperson for the Sultan later dismissed the report as inaccurate.

Last month, a senior company executive told Reuters that the firm would rather mortgage its trophy overseas hotel properties than sell them.

Unlisted Sahara, best known as the long-time former main sponsor of India's national cricket team, paid 470 million pounds ($759 million) in 2010 for Grosvenor House and about $570 million for the Plaza in 2012. It also owns the Dream Hotel in New York.

( Source : reuters )
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