03/08/2015 10:20 PM IST | Updated 15/07/2016 8:25 AM IST

Supreme Court Might Order Auction Of Sahara Properties To Refund Investors

Hindustan Times via Getty Images
NEW DELHI, INDIA - MARCH 4: Sahara Chairman Subrata Roy arrives at the Supreme Court on March 4, 2014 in New Delhi, India. An attacker, Manoj Sharma, claiming to be a lawyer from Gwalior, Madhya Pradesh managed to get close to Roy in the crowd and threw black ink on him. He was later detained and led away. Subrata Roy, head of the Sahara India conglomerate was accused by India’s regulatory body SEBI of raising nearly 200 billion rupees ($3.2 billion) through bonds that were later found to be illegal. (Photo by Arun Sharma/Hindustan Times via Getty Images)

NEW DELHI — The Supreme Court on Monday asked the Securities and Exchange Board of India (SEBI) to submit an application by September 14 seeking its approval to appoint a receiver to auction conglomerate Sahara's assets and refund investors in the troubled group's illegal bonds.

The court in June said the group needed to repay the entire $5.7 billion the court says it owes investors in illegal bonds within the next 18 months to secure the release of its jailed founder Subrata Roy.

The group has been trying to raise funds against its properties since the arrest of Roy in March 2014 after Sahara failed to comply with an earlier court order to refund money it had raised from millions of investors by selling them the bonds.

READ: Sahara Fails To Raise Bail Amount For Subrata Roy; Supreme Court Sets Fresh Terms

Sahara, whose assets include the landmark hotels Plaza in New York and Grosvenor House in London, has in the past year made several failed attempts to raise the money from its hotels and some other properties in India.

The Supreme Court is "contemplating" appointing a receiver to auction Sahara properties, Shekhar Naphade, an independent lawyer advising the Supreme Court on the case against Roy, told Reuters.

A final decision on this would be taken by the court after SEBI, which is seeking redress for investors in the company's bond programme, submits its application, he said.

The court is expected to take a decision on the auctioning of Sahara properties on Sept. 14.

Sahara, once one of India's most high-profile firms, said in a media statement after the court proceedings the Supreme Court had "appreciated the difficulties" that the group was currently facing in selling the properties.

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