Indian court grants tycoon Roy day release to sell luxury hotels
India's Supreme Court has given detained tycoon Subrata Roy permission to leave prison for a few hours a day to negotiate the sale of three trophy hotel properties, including the Grosvenor House in London.
Mr Roy was arrested earlier this year for contempt of court, after failing to turn up for hearings in a long-running battle between his Sahara group and the Securities and Exchange Board of India (Sebi), the market regulator.
Sahara, the Indian media-to-financial services conglomerate, has been in a long-running battle with Sebi concerning $4 billion that the group's subsidiaries raised in 2008 through convertible bonds. Sebi claims the company broke capital market rules by calling the bond issue a "private placement" to avoid regulatory scrutiny.
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Mr Roy is hoping that a sale of the overseas hotels will help to provide the Rs100 billion ($1.7 billion) that Sahara must deposit with the Indian authorities before he and two fellow directors can be released on bail.
Last month, a judgment from the Supreme Court cited a report valuing the Grosvenor House Hotel at Rs50.9 billion ($850 million), and the luxury Plaza and Dreams Downtown Hotels in New York at Rs34.3 billion ($570 million) and Rs14.6 billion ($243 million) respectively. The three properties are mortgaged with the Bank of China.
However, the Supreme Court judgment added that the disposal of the properties in a distressed sale could "prejudicially affect the interest of the depositors" in Sahara's investment products and "defeat the orders passed by this Court in its letter and spirit."
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India's highest court rejected Mr Roy's plea for bail on Tuesday, but has allowed the tycoon to leave prison between 10am and 4pm under police custody to negotiate the sale of the hotels once a concrete proposal is made.
Sahara could not be reached for comment.
Mr Roy, who calls himself the "managing worker" of his Sahara India Pariwar conglomerate – pariwar means family – is among India's most colorful businessmen. The privately-held Sahara group has sponsored the Indian cricket team and once ran an airline.
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His legal battle has been peppered with drama. Sahara employees have demonstrated to urge Mr Roy's release, and a man flicked ink at the businessman outside a court earlier this year, staining his face.
Sahara has taken full page adverts in national newspapers in which Mr Roy challenged the regulator to a live televised debate, and claimed to have repaid a large part of the group's outstanding liabilities.
"Whatever fight I have to go for, I will," one advertisement read. "My father always taught me not to do wrong, not to render injustice to anybody and neither to accept injustice or wrong from anybody."