Sahara backs Sebi's claim to bring back USD 13-million from jet sale proceeds

Engaged in a long-drawn legal battle with the Securities and Exchange Board of India (Sebi), Sahara has supported the regulator's claim before a US court to bring back nearly US $13 million from sale proceeds of a business jet of the crisis-hit group.

Sahara also lauded "Sebi's active cooperation" in the matter, which relates to a court-ordered sale of a corporate jet owned by a group firm after a litigation there and a receiver was appointed to look into distribution of the fund kept in an escrow account.

While the capital market regulator had approached the Indianapolis court in March with a claim that funds need to be transferred to Sebi-Sahara Refund Account, to comply with an order by the Supreme Court, the demand was rejected by the US court because it was made beyond the stipulated timeframe and was not in accordance with its orders.

However, the court had asked the receiver to verify the validity of the claim and take a decision accordingly.

Reacting to the development, a Sahara group spokesperson said in a statement on Monday that Hospitality Business Limited, a Sahara Group firm, had acquired a new Airbus A319 aircraft.

"The aircraft was to be given to a UK-based operator on a long-lease contract for operations as a luxury executive jet for private charters. The aircraft was sent by Hospitality to Indianapolis-based Comlux for high-end interior design and cabin completion.

"Hospitality was unable to pay the contracted fees to Comlux as a result of the Sahara group's inability to undertake further foreign exchange transactions. Comlux, therefore, filed a suit against Hospitality in the Indianapolis court for damages under a lien and for liquidated damages under the cabin completion agreement, which was decreed."

On the claims made before the court for funds from the escrow account, Sahara said, "The receiver invited any third party claims as ordered by the Indianapolis court."

The crisis-hit company added, "Apart from a claim received from the UK-based charter operator following the sale of the aircraft, Sebi also emailed the receiver staking claim to the money left over after the decreed amount had been paid to Comlux.

There were concerns raised by the court and the receiver that the claim/objection emailed by Sebi was not in proper form, it was not filed through the obligatory Mutual Legal Assistance Treaty protocols, and it was unsubstantiated."

The spokesperson further said that Sahara and Hospitality Business, however, made specific submissions in court that all residual monies must be remitted to the Sebi-administered account where Sahara had been accumulating money for compliance of the Supreme Court's orders.

"Sahara informed the court that it did not wish for the receiver to refund any excess amounts to Sahara, and instead invited the court to sanction the refund to the Sebi-nominated account, even if the court were minded to reject the Sebi claim on merits," the spokesperson said.

"Resultantly although the claim/objection of Sebi was not accepted by the Indianapolis court, on Sahara and HBL's specific request to the court, the receiver has remitted the entire residual amount (about US $13 million) directly to the account, details of which were communicated by Sebi to the receiver," the statement said.

"Sahara and Sebi have worked together to ensure that the entire sum of money was sent to India without delay.

Sahara acknowledges Sebi's active cooperation that enabled the money to be sent to India without the necessity of prolonged procedural delays, which the Indianapolis court and the receiver were entitled to require, as per law," it added.