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Sahara’s Roy given more time to seal hotels deal for bail money

New Delhi, Aug 14 (Agencies) : The Supreme Court on Thursday gave jailed business tycoon Subrata Roy a 15-day extension to conclude the sale of his luxury hotels from his makeshift office in prison and pay Rs 10,000 crore to secure bail.

Roy, head of the Sahara conglomerate, was initially given 10 working days to August 19 to talk to potential bidders for his three luxury hotels, including the Grosvenor House in London and the New York Plaza.

Roy is holding “very effective” negotiations with buyers and the group has signed a preliminary accord for the three hotels, his lawyer, S. Ganesh, told the Supreme Court on Thursday.

“An in principle agreement has been reached with a foreign party for the sale of the three hotel properties and in fact a draft memorandum of agreement has also been drawn up in this regard,” Ganesh told a bench headed by Justice T.S. Thakur.

“Still a lot remains to be done for a considerable amount of money,” Ganesh said.

The court granted Sahara 15 more days that would not include weekends and public holidays, but said that would be the last extension.

Roy, 66, has been held in Tihar Jail for more than five months after failing to appear at a contempt hearing in a long-running dispute with the capital markets regulator over his group's failure to repay Rs 20,000 crore to investors who were sold outlawed bonds.

Last week he was given a 600-square foot office inside the prison complex with facilities like computers and video conferencing. He is also allowed to receive visitors to try to sell or mortgage the hotels.

The apex court had refused to release Roy on interim bail or parole but had allowed selling of his luxury hotels.

Of the Rs 10,000 crore, Sahara has to pay half in cash and the remainder in a bank guarantee. Sahara has raised Rs 3,117 crore which has been deposited with the capital markets regulator.

Sahara is also willing to raise a loan by mortgaging its Aamby Valley mega township project in western India, the lawyer told the court.

Sahara, best known as the former main sponsor of the national cricket team, has vast real estate holdings, stakes in media and hotels, and owns part of a Formula 1 team.

Its main business however, was selling financial products to small investors, mostly in smaller towns and rural areas. It was two such products that were later ruled to be illegal and the group was ordered in 2012 to repay the investors with interest.

Sahara says it has repaid most investors, a claim that has been disputed by the capital markets regulator and the Supreme Court. The court has estimated Sahara's liability at up to Rs 35,000 crore.