Indian conglomerate Sahara Group said on Thursday that a letter intended to support a $2 billion transaction with a U.S.-based former broker was forged, dealing a major setback to the group's efforts to secure bail for its jailed boss, Subrata Roy.
The statement came a day after Reuters reported evidence that Saransh Sharma, a California man who was leading the deal through his company Mirach Capital Group, didn't have the money to pull off the transaction. A manager at Bank of America told Reuters he didn't write a crucial letter, attributed to him, which purported to verify the existence of a billion-dollar bank account.
Sharma had said he was backed by a group of U.S. and U.K. investors for the deal, whom he declined to name, and said they were the source of funds supposedly placed in the Bank of America account.
Roy, a maverick businessman who during his heyday socialized with presidents and film stars, has been held at a New Delhi jail since March on contempt charges, after he failed to comply with a court order to repay investors in a bond scheme that was later ruled to be illegal. Roy is being held on $1.6 billion bail, the largest ever in India.
Sahara has been in talks with Sharma's Mirach Capital to raise funds by refinancing its overseas hotels, including New York's Plaza and Grosvenor House in London.