Mumbai: The Sahara Group has been funnelling cash from small savers to fund one of its biggest projects, a luxury resort here.
Sahara has ploughed at least Rs 1,500 crore from two of its credit cooperatives into the Aamby Valley resort project through investments in preference shares, according to documents filed with the companies regulator.
It is doing so as some investors in its credit cooperatives complain they have struggled to get Sahara to pay out their matured time deposits — even for sums as low as Rs 30,000. The credit cooperatives investments into Aamby Valley are not illegal. Cooperatives are allowed to invest in shares and bonds of infrastructure and real estate companies after board approval, if they are in the interest of the cooperatives, according to the law under which these cooperatives operate.
Responding to queries, a spokesman for Sahara Credit Cooperative Society said in an emailed statement that "all required approvals" were in place and the investments would not put investors at risk. He did not elaborate.
Some experts say if Sahara is using deposits from the cooperative societies to finance Aamby Valley, members of the cooperatives might face difficulty recouping their money. That’s because the conglomerate is under pressure to sell of some of its prized assets to pay off investors in a savings deposit scheme the Supreme Court has declared illegal.
The two credit cooperatives could be hit “if Aamby Valley is monetised and the proceeds are given up to the investors of the earlier financial schemes, which is sitting in the Supreme Court,” said Prem Rajani, founding partner of Mumbai-based law firm Rajani Associates.
The Supreme Court will decide next Tuesday whether to appoint a receiver to auction off some of Sahara's properties as part of efforts to refund investors in the banned savings deposit scheme.
An official from the agriculture ministry’s credit cooperatives division said Sahara could be “misusing provisions of the law” that govern credit cooperatives by investing their money into Aamby Valley.
