Like Vijay Mallya's, selling Sahara assets 'herculean task': Sebi lawyer

Selling properties of Sahara group will be a "herculean task", market regulator Sebi's lawyer Arvind Datar said on Friday, citing example of the recent no-show by bidders at an auction for Vijay Mallya's Kingfisher House building.

To raise the bail money amount for the release of Sahara's chief Subrata Roy, Supreme Court has asked Sebi to initiate the process of selling 87 "unencumbered" properties of Sahara group, whose title deeds are with the regulator.

Datar, who has been Sebi's counsel in the long drawn legal battle with Sahara group, said it would be a herculean task to sell the properties.

"What I am worried is that there are several properties worth approximately Rs 40,000 crore. Now we have to go for title scrutiny, we have to get all that done and that is a herculean task," he said.

Responding to a query on whether there is a timeline for assets sale, Datar said he really does not know. "For example, Mallya's Kingfisher building has not been sold... I have suggested that let's not go into valuations, what is the circle rate and if I am getting a value of 90%, I have the liberty subject to the judge's approval to sell the property. I have no time line," he said.

Banks recently put to auction Kingfisher House, the erstwhile headquarters of the long-grounded Kingfisher Airlines, as part of their efforts to recover dues totalling over Rs 9,000 crore from Vijay Mallya and his group firms.

But, no bid came through and the banks are still working on a fresh process to sell the property, whose base prices was pegged at Rs 150 crore. Datar was interacting with the audience after delivering a lecture on 'Sahara vs Sebi' case, organised by Vidhi Centre for Legal Policy here.

Regarding progress on Sebi's refund process for Sahara investors, as directed by Supreme Court, he said there are three crore total depositors but refund claims have been made by 5,000 depositors.

"The total amount refunded by Sebi is Rs 55 crore as I speak," he added. Datar said the amount to be paid to investors is around Rs 24,000 crore and along with interest it is about Rs 34,000 to Rs 35,000 crore.

"As I speak, out of the Rs 5,000 crore in cash, they are running short by Rs 500 to 600 crore, they have collected most of the money. Now the only thing is that they have to collect Rs 5,000 crore and then get the bank guarantee. We said it has to be guaranteed by a bank in India because they got a guarantee from a bank in Panama coincidentally... that time there was no Panama problem," he noted.

According to him, then it was a bank from Venezuela and got some bank in Spain but that entity's chairman said they have never written such a letter and that they have nothing to do with the particular transaction.

Referring to Supreme Court's order asking Sebi to start selling assets of Sahara, Datar said the ball has been put in the regulator's court.

"As I speak today, Subrata Roy Sahara completes 766 days in jail, I made a back of the envelope calculation. How long will he be there? Till he pays Rs 10,000 crore he has to be there. Once he pays Rs 10,000 crore he can come out of jail and then we have the further arduous task of recovering the balance Rs 25,000 crore... I think the main problem is still there. As the line goes 'picture abhi baaki hai' and we don't know when and where it will take," Datar noted.

For interim bail of Roy, the Supreme Court had put conditions like depositing Rs 5,000 crore in cash as well as furnish a bank guarantee of equal amount. Roy has been in jail since March 4, 2014. Last month, while directing Sebi to sell Sahara properties, the Court had also asked the regulator not to sell any of the property below 90% of the circle rates.

The Court had also said that Sebi would have to take its prior nod before going ahead with the sale of any property if the regulator receives bids even below 90% of the circle rate.