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Friday August 1, 2014 MYT 11:25:03 PM
Friday August 1, 2014 MYT 11:26:02 PM
by suchitra mohanty
NEW DELHI (Reuters) - India's Supreme Court has granted a jailed business tycoon an office, a phone, Internet connection and three secretaries in the Delhi prison that has been his home for five months so he can sell two of his company's iconic hotels to help pay bail.
Subrata Roy, head of the Sahara conglomerate, was jailed on March 4 for failing to appear in court in a legal battle with India's capital market's watchdog. He needs to raise 100 billion rupees ($1.6 billion) (950 million pounds)to have a chance of release.
The Supreme Court gave him 10 working days from Monday to accomplish the sale of the Grosvenor House Hotel in London and the Plaza Hotel in New York.
So he can negotiate with potential bidders, Roy will get a conference room inside the jail complex, a mobile phone, laptop and desktop computers, Internet access and video conferencing facilities, as long as he pays for them.
Three of his company's secretaries will be allowed to join him to assist with the sale, the court said.
"This is a distress situation. It is a battle of nerves. And we need all the facilities and gadgets to negotiate the deal," Harish Salve, one of India's top lawyers who represented Sahara in the case, told the court on Friday.
If Roy raises the funds and deposits them with the regulator, the court will meet again to decide on any further conditions for his release.
Roy was jailed after he failed to appear at a contempt hearing in the long-running dispute over the company's failure to repay billions of dollars to investors who were sold outlawed bonds. He has yet to be charged over the bonds dispute and denies any wrongdoing.
Sahara said it had repaid most investors, but its claims have been contested by the regulator and the court.
Despite multiple pleas, Roy has been denied bail unless he can deposit the 100 billion rupees with the regulator. The court estimates Sahara's total liability to be between 330 and 350 billion rupees.
The sale of Roy's prized hotels abroad are seen as critical to raise the deposit. Sahara paid 470 million pounds ($791 million)(469 million pounds) for Grosvenor House and about $570 million for the Plaza in 2012. It also owns the Dream Hotel in New York.
Media reports have named Indian billionaire Cyrus Poonawalla and U.S.-based Madison Capital Holdings LLC as potential buyers.
Based in Lucknow, the capital of India's most populous state Uttar Pradesh, Roy calls himself "managing worker and chairman" of Sahara and chief guardian of the "world's biggest family", overseeing businesses with almost a million staff and agents.
He has often been described in media as a billionaire, although last year he said his personal assets were worth less than $1 billion. In his heyday, the tycoon was often photographed with Bollywood stars and cricketers.
Sahara is worth $11 billion and has more than 36,000 acres (15,000 hectares) of real estate, according to its website. One of its main businesses is the sale of financial products, largely to small investors in towns and rural areas. It was two such products, later ruled illegal, that drew the market regulator's attention.
Critics say Sahara's investment products are designed to evade regulatory oversight and that the company lacks transparency on the source and use of funds.
(Writing by Devidutta Tripathy; editing by Rafael Nam and Tom Pfeiffer)
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