SC allows Sahara Group to raise loan for Subrata Roy's bail

The Sahara Group's persistent efforts to raise Rs 10,000 crore for securing bail for its incarcerated chairman Subrata Roy got a shot in the arm on Friday with the Supreme Court (SC) allowing it to go ahead with its proposed transactions for a loan of around $1,050 million from abroad.

However, the apex court put conditions, including the Reserve Bank of India's (RBI) approval for transfer of funds raised in the US to India to meet the requirement set for release of Roy, who is in Tihar jail for more than nine months for non-refund of over Rs 20,000 crore with interest to depositors.

The SC, which had asked Roy to pay Rs 10,000 crore to get bail, out of which Rs 5,000 crore should be paid in cash and rest in bank guarantee, extended its August 1 order for conference facility for him in the jail to deal with the nitty-gritty of transactions till February 20.

A Bench headed by Justice TS Thakur passed the order after the Securities and Exchange Board of India (Sebi) and senior advocate Shekhar Naphade, who is amicus curiae, agreed with the plea of Sahara that there is no risk for the court in allowing the transaction for the loan.

"In the circumstances and keeping in view the submissions of counsel for Sebi and amicus curiae and other safeguards, there is no reason why we do not allow the prayers," the Bench said while making it clear that permission for transaction of loans would be subject to certain conditions.

The Bench said that Sahara will move the RBI at appropriate level or before its competent authority and make representation for clarification for bringing the amount arranged in the US and deposit it in the account of Aamby Valley Limited, Mauritius, a fully owned subsidiary of Sahara India's Aamby Valley Limited.

Further, the Bench said that the entire loan amount generated from the US shall be deposited with Aamby Valley Limited, Mauritius, and not utilised or transferred by the Indian subsidiary for any other purpose except for being deposited with Sebi in the Sebi-Sahara refund account.

Thirdly, Sahara will not be free to claim any equity on the amount raised as loan from overseas and deposited with Aamby Valley Limited, Mauritius, for the purpose of bailing out Roy.