14/02/2013
NEWS STORY
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Just twenty-four hours after it was reported that banks are recalling a £1bn loan to Vijay Mallya's Kingfisher Airlines, it appears that Force India's co-owner, the Sahara Group, has problems of its own.
It is understood that India's capital markets regulator is seeking to recover around $3 billion from the group, following a lengthy battle over a violation of security rules by two Sahara real-estate companies.
In August, the Supreme Court ordered Sahara India Real Estate Corp. and Sahara Housing Investment Corp. to reimburse the money to investors by February via the Securities and Exchange Board of India (SEBI).
The Supreme Court agreed with a 2011 SEBI ruling that Sahara had masked the bond issue as a private placement in order to avoid regulatory scrutiny and subsequently marketed the offer to millions of people. Thus far, according to reports, Sahara has failed to comply with the court order, while the SEBI claims that the company has not handed over documents detailing its investors - which are needed to begin the redemption process.
On Wednesday, SEBI froze the Sahara Group assets, a move backed by the Supreme Court under the original order if Sahara failed to comply with the court's direction to repay the money.
In a statement, the Sahara Group has said it has already repaid a significant number of the bondholders, claiming that the SEBI had not taken this into account in its recent order.
One of India's biggest companies, Sahara, which owns a 42.5 percent stake in the Force India Formula One team, was founded by Subrata Roy (above right) who made his fortune taking small deposits from rural Indians.
Having frozen the bank accounts of Sahara India Real Estate Corp. and Sahara Housing Investment Corp., the SEBI has also frozen the bank account of Mr Roy and all properties held in his name and those of three directors of Sahara.