New York Plaza Owner Seeks to Use Prison for Sale Negotiations

Photographer: Prashanth Vishwanathan/Bloomberg

Over the past 35 years, Subrata Roy has built an empire that at the end of 2012 was valued at $11 billion by collecting amounts as small as 32 cents every day from rickshaw pullers, laundry washers and tire repairmen. Close

Over the past 35 years, Subrata Roy has built an empire that at the end of 2012 was... Read More

Close
Open
Photographer: Prashanth Vishwanathan/Bloomberg

Over the past 35 years, Subrata Roy has built an empire that at the end of 2012 was valued at $11 billion by collecting amounts as small as 32 cents every day from rickshaw pullers, laundry washers and tire repairmen.

Subrata Roy, the jailed owner of the Sahara India Pariwar financial-services group, sought court permission to use his prison’s guest house to negotiate the sale of overseas hotels as he seeks to pay his 100-billion-rupee ($1.66 billion) bail.

Roy, 66, who has been in court-ordered custody since March, is seeking secretarial assistance, phone, video conferencing and others facilities for discussions to sell stakes in the Plaza and Dreams Downtown hotels in New York and the Grosvenor House in London, according to a court filing on July 24.

He also wants to be relocated within New Delhi’s Tihar prison to an outer building with a separate entrance, to ensure confidentiality for prospective buyers and protect them from the “glare of media, rival competitors and other inmates,” the filing said, citing the need for “a congenial atmosphere.”

Roy also wants access to three secretaries around the clock, so that a negotiations with prospective buyers in India and across five time zones can proceed quickly, the filing said.

“We should provide facilities to Roy to arrange money for bail,” Judge T S Thakur said at a hearing in New Delhi on the request yesterday. “It isn’t a small amount. We can’t keep him in jail and ask him to pay money. International buyers would be interested in these assets,” Thakur said.

The judge asked the government to reply to Roy’s request by Aug. 1, indicating what facilities it is willing to provide. Roy was earlier denied a 50-day bail to negotiate the sale of the hotels.

Poonawalla

Pune-based billionaire Cyrus Poonawalla, owner of the world’s biggest vaccine maker Serum Institute of India, has offered 550 million pounds ($933 million) for the Grosvenor House, the Economic Times newspaper reported July 24.

The filing is the latest effort by the Sahara group founder to secure his release. Tihar prison is the largest correctional facility in South Asia.

Roy’s arrest at the end of February came as part of a almost four-year dispute between the shadow financier and India’s securities regulator, which had faulted Sahara for selling a convertible debt instrument without its approval. Roy had been seeking to convince the court that Sahara has complied with an order to refund 240 billion rupees that it raised from 30 million depositors.

Sahara, which means “support” in Hindi, owns overseas hotel properties and at least 120 companies, including television stations, a hospital, a dairy farm, retail shops selling products from detergents to diamonds and a stake in India’s only Formula One racing team. It also claims to own 14,600 hectares (36,000 acres) of land, an area the size of Liechtenstein.

Shadow Banking

The financier, who calls himself “Sahara Sri” and started out in 1978 collecting deposits from doorsteps, is part of the $670 billion shadow-banking industry in Asia’s third-largest economy that regulators are increasingly cracking down on.

Over the past 35 years, Roy has built an empire that at the end of 2012 was valued at $11 billion by collecting amounts as small as 32 cents every day from rickshaw pullers, laundry washers and tire repairmen.

To contact the reporters on this story: Bhuma Shrivastava in Mumbai at bshrivastav1@bloomberg.net; Pratap Patnaik in New Delhi at ppatnaik2@bloomberg.net

To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net Dick Schumacher

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.