SEBI files contempt plea against Sahara for obstructing auction of Aamby Valley

Securities and Exchange Board of India (SEBI), the country's market regulator, filed a contempt petition against Sahara's Subrato Roy and other senior executives for allegedly obstructing the auction of its prized Aamby Valley.

Representing SEBI, advocate Pratap Venugopal, mentioned the matter before a bench led by the Chief Justice of India Dipak Misra and submitted that the approximately Rs 37,000 crore project "had adopted subterfuge methods to avoid auction of the property." SEBI also accused Sahara of declaring a "lockout" – effectively handing over the more than 8,000-acre property to police authorities, days ahead of its proposed auction.

According to the petition, on September 28, a representative from Aamby Valley Private Limited had approached police officials, Maharashtra's additional chief secretary of home and the official liquidator – the Bombay High Court, informing that the company has seized to operate citing lack of funds. The letter further said that the company could not guarantee security to the international school within the premises and suggested that the police should take over.

This move affects the proposed auction as it would drive the bidders away, SEBI submitted. "Now, nobody is willing to bid," Arvind Datar, who also represents SEBI in this matter, told DNA.

At the previous hearing, the top court denied any relief to Roy's Sahara group and ordered Bombay High Court to to go ahead with the auction proceedings.

If all went well, and someone bought Aamby valley, the successful bidder would be required to deposit the money by January 2018 after which the top court would approve of the final sale.

"We are constrained to state that the respondent-contemnor (Subrato Roy) in his own way has treated this Court as a laboratory and has made a maladroit effort to play, possibly thinking that he can survive on the ventilator as long as he can. He would have been well advised that a person who goes on a ventilator may not survive for long and, in any case, a time would come when he has to be comatosed," the bench had said on September 11.

"Grant of further time to the respondent-contemnor and entertaining post-dated cheques which are dated 11 November 2017, would tantamount to travesty of justice and extending unwarranted sympathy to a person who is indubitably an abuser of the process of law. He, who thinks or for that matter harbours the notion that he can play with law, is under wrong impression," the bench said in a strongly worded order.

The more than 8,000-acre township -- located 200 kilometres from Mumbai is valued at more than Rs 34,000 crore. The sale of this property would strike a blow and "finish my business" Sahara had said.

After Sahara failed to pay the requisite Rs 5,000 crore, on April 17, the court had also decided to auction Aamby Valley. Roy's pleas to prevent the auctioning of this jewel fell on deaf ears as a three-judge bench had fixed the fair market price and instructed the Bombay High Court to "proceed with the formalities of auction by preparing the draft terms and conditions and other formalities".

Sahara, which allegedly duped its investors of Rs 24,000 crore, has been finding ways to raise money to pay the principal amount. So far, Sahara has managed to repay around Rs 16,000 crore.