Subrata Roy, the jailed head of Sahara conglomerate, is back in a cell after living in a makeshift prison office for two months while working on the sale of three luxury hotels in New York and London, a deal that is still hanging.
The Supreme Court had allowed the tycoon to use an office, phone, Internet connection and three secretaries in the Delhi prison to facilitate the sale of three hotels including Grosvenor House in London and the Plaza in New York.
Roy needs to raise Rs100bn ($1.6bn) from the hotel sales to have a chance of obtaining release on bail.
He has been moved back to a cell after a court-imposed deadline for the use of the office expired, although the businessman had requested more time, Tihar Jail spokesman Mukesh Prasad said.
“He was asking officials. We told him we don’t have the power to extend those facilities,” the spokesman said.
Roy was jailed for contempt of court in March amid a long-running dispute with India’s capital markets watchdog over Sahara’s failure to repay billions of dollars to investors who were sold outlawed bonds.
A source close to the company said Roy did not have enough time to complete the sale.
“Any negotiation of big-ticket items takes time, out of which maximum time gets spent on conducting due diligence and working out the current valuations,” the source said.
“Roy and his team are working hard and trying their best even in wake of the current restrictions that Roy is in now,” he said.
A Sahara spokesman declined to comment.
Sahara has said it is in talks with multiple potential buyers but has refrained from naming any suitors.
In August, the Wall Street Journal’s online edition reported that the Sultan of Brunei had made a $2bn bid for the hotels, but a spokesperson for the Sultan later dismissed the report as inaccurate.
Last month, a senior company executive said that the firm would rather mortgage its trophy overseas hotel properties than sell them.
Unlisted Sahara, best known as the long-time former main sponsor of India’s national cricket team, paid £470mn ($759mn) in 2010 for Grosvenor House and about $570mn for the Plaza in 2012. It also owns the Dream Hotel in New York.
The acquisitions were financed through borrowings from the Bank of China.
Sahara also owns at least 120 companies, including television stations, a hospital, a dairy farm and retail shops selling everything from detergents to diamonds, alongside a stake in India’s lone Formula One racing team.
Sahara also claims to own 14,600 hectares of land.
Employees of Sahara had offered to collect Rs50bn, from over 1mn salaried and field workers employed by the group to help get Roy out of jail.
Directors of a unit of the group, Sahara’s e-Multipurpose Society, and the group’s “associates” had sought a minimum contribution of Rs100,000 per head towards Roy’s bail bond of Rs100bn, the Press Trust of India reported recently.
In return, the contributors would receive shares in e-Multipurpose Society.
Roy, 65, has not been charged with a crime. He surrendered to police on February 28 after the court issued a non-bailable arrest warrant two days earlier for failing to heed its summons.
Roy, who calls himself “Sahara Sri”, operates within the $670bn shadow-banking industry, which refers to the provision of capital by loans or investments between companies outside the formal banking system. It includes hedge funds, private-equity funds and insurance companies.
Roy is often described in media reports as a billionaire, although he claims to only have assets worth about Rs50mn.