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Many Sahara realty projects stuck; experts pessimistic

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Many Sahara realty projects stuck; experts pessimistic

Last updated: February 8 2015
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  • Many Sahara realty projects stuck; experts pessimistic

    Eight months after Lucknow-based Sahara group announced the launch of 10 townships and said it would follow these with another 58 housing projects in the current financial year, work on the 10 sites in the tier-II and tier-III cities is moving at a snail’s pace.

    According to sources in the group, it is yet to give the detailed project report to the authorities in respective states where it has launched those projects. The group has acquired many land parcels for the 58 new projects but is yet to launch these, according to sources.

    In June 2012, Sahara Infrastructure and Housing, real estate arm of Sahara India Pariwar, launched the 10 townships at a gala event called ‘Shubh Aagaman’ on the occasion of Sahara chief Subrata Roy’s birthday in Lucknow and followed it up with similar functions at all its 10 sites.

    Of the 10, nine are lifestyle housing projects branded ‘Sahara City Homes’, while one premium housing project is called ‘Sahara Grace’. It also said that at eight places its projects were under construction. In all, Sahara said it would have 76 housing projects in 2012-13.

    On February 13, capital markets regulator Securities and Exchange Board of India (Sebi) asked banks to freeze accounts and seize properties of two other Sahara group companies, Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC) for defying Supreme Court’s orders to refund 24,000 crore to its investors.

    Bankers’ take
    According to bankers and real estate experts, following the Sebi order, the group may find it difficult to raise funds for its realty projects from banks and buyers.

    While affordable homes are priced at 5-15 lakh, prices of other flats range from 16 lakh to 52 lakh. The booking amount is 10 per cent of the total cost.

    The ‘Sahara City Homes’ integrated townships were planned in Pune, Aurangabad, Jodhpur, Gwalior, Bareilly, Solapur, Porbandar, Katni and Kashipur, while ‘Sahara Grace’ was coming up in Cuttack-Bhubaneshwar.

    Spread on 900 acres, the 10 projects were to offer 25,000 residential units with world-class amenities.

    But for various reasons, the company is yet to start construction on many of the sites.

    For instance, in Pune, the company has not started the piling work and the plot is just barren. “When I approached them a week ago, the sales team said they do not have brochures and pamphlets as they have run out of stock,” said a prospective buyer from Pune. Many realty brokers in the city said they no longer worked with the company on the project.


    Even realty brokers in cities such as Aurangabad, Porbandar, Jodhpur, Gwalior, Bareilly and Solapur said the projects in those cities were not making much progress.

    When contacted, Abhijit Sarkar, head of corporate communications at Sahara India Parivar, said that development and construction work had begun on all the 10 sites. Sahara, he said, had 18 live projects, of which eight are in advanced stages of construction.

    Around 1,000 keys were given to customers in these projects and the group aims to hand over 2,000 more this year. “More projects will be launched in 2013 and the balance will follow in the next two to three years,” Sarkar said.

    He claimed the company has never failed to meet its assurances, adding that there had been delays because of hindrances in getting government approvals or compact land parcels.

    “Our plans remain on track and our aim undeterred. The real estate business will continue to be one of the group’s prime focuses,” he said.

    A senior public sector banker said, “I don’t think we will be comfortable in lending to Sahara projects. Promoters will be choked after attachment of the accounts. Therefore, we will also not like to put our money.”

    He added that even if a particular project has a clear title, it’s not prudent to lend to the project as there are so many uncertainties around the company.

    The Sebi order might also prompt buyers to ask for refund from the company in its existing projects, said the head of a Delhi-based global property consultant.

    Sarkar said that the group’s customers continued to show good faith in them. “In turn, we are committed to fulfilling our promises to them and our year-on-year sales growth is testimony to that.”

    He also downplayed the impact of the Sebi order on its relationship with banks. “Our association with banks has never been in question. Most of the established and popular banks from the private and public sector offer loans to our customers. This shows their continued trust in Sahara,” he said.
    Many Sahara realty projects stuck; experts pessimistic | Business Standard
    I hope the group resolves its problems and investors do not suffer in the final analysis.
  • #2

    #2

    Re : Many Sahara realty projects stuck; experts pessimistic

    The curious case of 5,984 Kalawatis in Sahara list

    By May 2, Sahara India Real Estate Corporation Ltd (SIRECL) has to prove the "genuineness" of all its investors to the Supreme Court. It has a difficult task on its hands: the name 'Kalawati' figures 5,984 times on that list, same names appear against different locations, and geography takes a giant leap with 'Jaipur Nagpur Maharashtra' and '187 Aurangabad Lucknow UP' mentioned as addresses.
    SIRECL had given the list of investors to the Securities and Exchange Board of India (SEBI) in a CD protected with high-level security encryption, preventing the market watchdog from doing any analysis or sorting of data. The Indian

    Express has accessed that list, running into a voluminous 1.12 lakh pages, containing the names, addresses and investments of 66,12,836 investors.

    Kalawati, a name made famous by Congress vice-president Rahul Gandhi during his July 2008 speech in Parliament, springs up consistently — at least 55 times against one address. The namesakes of the Vidarbha farmer's widow whose plight Rahul lamented hold a total investment of approximately Rs 5.5 crore.

    When contacted, Sahara Group spokesperson Abhijit Sarkar said: "It may be possible to have many people with the same name as it is a very common name... Their addresses, parentage, investment and also the day of investments would be different, which clearly indicates that though of the same name, they are different investors."

    In fact, the name had caught the eye of Supreme Court judge J S Khehar too while throwing out the list of investors submitted by SIRECL in August 2012. In the order, Khehar had said "the impression emerging from the single entry extracted (Kalawati) is that the same seems totally unrealistic, fictitious, concocted and made-up", adding that the court was not convinced enough to go beyond the first page.

    In the same order, the court had asked the Lucknow-based conglomerate to refund the Rs 19,000 crore it had raised from its so-called investors, under SEBI's supervision. The Supreme Court later asked SIRECL to prove that its investors were genuine, and appointed former Supreme Court judge B N Aggarwal to monitor the list.

    The Indian Express was the first to report that SEBI had received only 69 responses to the correspondence it had sent to a batch of 20,000 SIRECL investors on the basis of details provided in the CD by Sahara.

    The controversy can be traced to the April 25, 2008, issue by SIRECL and Sahara India Housing Corporation Ltd of Optionally Fully Convertible Debentures (OFCD). SEBI says OFCD falls under its jurisdiction and the two firms had marketed it without their approval.

    Sahara, however, claims that the OFCD was not marketed through public but through "private placement", to "friends, associates, group companies, workers/ employees and other individuals, who are associated or affiliated or connected in any manner with Sahara India Group of Companies".

    The Himachal Pradesh and Allahabad High Courts and SEBI had referred the matter to the Enforcement Directorate (ED) for investigating aspects of money laundering. SEBI sources said the agency is yet to initiate any inquiry. Sameer Bajaj, the Mumbai zonal chief of ED, where SEBI forwarded the case, was not available for comment.

    A look at some of the Kalawatis who qualify as Sahara 'friend', 'associate', 'group employee' or 'others affiliated with it':

    * 'Kalawati' first appears at Serial No. 90 in the list of those who subscribed to the SIRECL OFCD. An investment of Rs 15,000 is credited against a 'Kalawati Singh, Rajapur Dillipur Bhojpur BR'. The same entry then appears 17 more times on the list.

    * The Kalawati entry on the basis of which Sahara's investor list was thrown out by the SC appears at Serial No. 6603675, with the address 'Uchahara, S K Nagar, UP'. Interestingly, another entry at Serial No. 1968216 in the name of 'Mairunnisha' bears the same address.

    * 'Kalawati' figures several times against the address 'Civil Lines Buxar BR'. Not only that, there are 150 other entries from this address with all possible names.

    * A 'Kalawati Devi, W/O Dharam Bhagwi Ch. Dadri Bhiwani HR' appears 55 times with a consistent investment of Rs 15,000 per entry except Rs 10,000 at one time.

    * 'Kalawati Devi, 140 VPO Bhagwai Ch. Dadri HR' is listed 16 times. Ch. Dadri presumably stands for Charkhi Dadri, a district in Haryana adjoining Delhi.

    * If 'Kalawati Bhusari' surfaces in 'Jaipur Nagpur Maharashtra' at one time, another 'Kalawati' lives at '187 Aurangabad Lucknow UP' (Serial Nos. 118507 and 6612830).

    * The address for 'Kalawati Ahir' (Serial No. 1887125) is 'W No 12 Nepalganj Banke UP'.

    * The 'Kalawati Chamar' at Serial No. 306151 appears to live just a ward away, but in a different country. The address for her is 'W No 13 Nepalganj Saigaw Nepal'. Nepalganj, incidentally, is a popular tourist destination in Nepal.

    All our investors genuine: Sahara

    When contacted, Sahara Group spokesperson Abhijit Sarkar said: "While the CD containing the list of investors was given to SEBI, we had very categorically advised SEBI that the data is private and confidential and SEBI should use it only for the purpose of its investigations. As this data is not shared with anyone else except SEBI, it is unfortunate that SEBI has indulged in media trial by privately leaking the same to media.

    "It may be possible to have many people with the same name as it is a very common name... their addresses, parentage, investment and also the day of investments would be different, which clearly indicates that though of the same name, they are different investors.

    "Further, it is incorrect to say that the investors' list is at present under the scanner of Hon'ble Supreme Court... It may be possible that more than one person residing at the same address may have joined the scheme or one person may have subscribed at more than one occasions. But we assure you that all our investors are bone fide and genuine and the correctness of the same is assured by us.

    "We have been repeatedly asking SEBI to verify the investors and associate us in the process of verification... SEBI has, however, not yet started the verification process but is unfortunately indulging in media campaign against us.

    "Aurangabad is a place in Lucknow in Uttar Pradesh and is not a geographically impossible location."
    The curious case of 5,984 Kalawatis in Sahara list - Indian Express

    Ponzi schemes are the most successful in our nation. Ponzi operators get away with looting the uneducated and also those who choose highest improbable returns over conservative and safe investment.

    Comment

    • #3

      #3

      Re : Many Sahara realty projects stuck; experts pessimistic

      Supreme Court stays proceedings on Sahara group, Subrata Roy's petition

      The Supreme Court today stayed proceedings on pleas filed by Sahara group and its chief Subrata Roy against refunding Rs 24,000 crore to investors and attachment of their properties after the SEBI accused them of approaching different forums for delaying the process. A bench comprising by Justices K S Radhakrishnan and J S Khehar also issued notice to them on SEBI's plea seeking transfer of all cases filed by them in Securities Appellate Tribunal and Allahabad High Court to Supreme Court.
      During the hearing, the market regulator accused the group and its promoter of making 'mockery' of apex court's order which had directed them to deposit Rs 24,000 crore to SEBI which would refund the money to over three crore investors.
      Senior Advocate Arvind Dattar, appearing for SEBI, submitted that 'shocking things' are in CD which was supplied by Sahara Group on investors who had put in their money in its two companies - Sahara India Real Estate Corporation (SIREC) and Sahara Housing Investment Corporation (SHIC).
      He said although names of around 6,000 Kalawatis are not there as reported in media but there are 1,433 Anirudh Singhs there in the list whom the group claimed to have refunded money 34 times.
      Senior advocate Ram Jethmalani and advocate Keshav Mohan, appearing for Sahara group, on the other hand, submitted that Sebi is wasting their time and also said that there is serious atmosphere of prejudice prevalent against it as SEBI is leaking information to media on investors.
      The bench, however, said that every case is discussed in media and "We do not get prejudiced by such reports".
      "We are not prejudiced. We are not concerned about Kalawati. Lets proceed on legal issues," the bench said adding "Do not transgress the case".
      The bench was hearing a contempt plea filed by SEBI against the Group for not complying apex court's order passed on August 31, 2012 for depositing Rs 24,000 crore to SEBI.
      In the last hearing the bench accused Sahara group and Roy of 'manipulating courts' by approaching different forums for relief.
      Sahara group and SEBI are locked in legal dispute over the refunding of 24,000 crore by its two companies--SIREC and SHIC--to over three crore investors.
      Earlier, the Supreme Court had dismissed its plea for more time to refund the amount.
      SIREC and SHIC along Roy are facing contempt proceedings in the apex court which had on February 6 allowed SEBI to freeze accounts and seize properties of its two companies for defying court orders by not refunding the money to investors.

      Supreme Court stays proceedings on Sahara group, Subrata Roy's petition - Indian Express
      The saga continues.Court proceedings and legal battles.Highest profile lawyers bent on showing theri legal skills..Net result should be that investment atmosphere should become better and investor money remains safe.Ponzi operators should not be allowed to get away,money laundering activities should not get free reign.Rule of law should prevail.
      At the end of it,we must remember that a fool and his money are soon parted.

      Comment

      • #4

        #4

        Re : Many Sahara realty projects stuck; experts pessimistic

        Last Chance Saloon for Sahara

        Time is running out for Subrata Roy, but don’t rule out a Houdini act yet.
        Will the Sahara Group be penalised or will the business-politics nexus yet again bail out Subrata Roy? In the latest in a series of orders, the Supreme Court has given Sahara companies and Roy a week to reply to a contempt petition filed by the market regulator, Securities and Exchange Board of India (SEBI), which said Sahara had disobeyed every single line of the 31 August 2012 judgment ordering it to refund Rs 24,000 crore collected from investors.
        As SEBI cannot make the arrests, the big question is: on what basis can Roy be taken into custody? Assuming the investors don’t exist (since no claims are being made for the deposits), should this case be tried under the Prevention of Money Laundering Act? And that puts the focus back on the source of the funds.
        Sahara has already made a spectacle of its fight with SEBI and questioned its authority to regulate its business. The merry-go-round has gone from full-page ads in dailies criticising each other to Sahara refusing to obey the SC’s orders. “They must respect some order somewhere,” says SEBI counsel Arvind Datar.
        The SC Bench was shocked when SEBI informed it of Sahara’s petition in the Allahabad High Court following the SC’s order for attaching Sahara’s properties if they failed to deposit the money. “How did the matter go from SEBI to the Allahabad HC? You are manipulating court proceedings,” said the judges.
        No one knows whether Sahara will be able to cough up the money. “When we wanted to attach Sahara’s bank accounts, they said they won’t be able to pay the investors. Later we attached their properties,” Datar told the SC. SEBI believes the properties were bought with the investors’ money. “Now, they say they have already sold these properties and paid back the investors. They are not giving us the title deeds.”
        The Sahara Group has a long and complex history of financial controversy. The group started business in the 1970s by collecting small deposits from people with limited access to banks. Sahara used fees on the deposits to invest in its businesses. The SC said the money was raised by “dubious means” from nearly 3 crore investors, and must be returned with 15 percent interest. But the group retorted saying “it is safeguarding the livelihood of 10 lakh families of Sahara’s workers along with more than 9 crore depositors, investors and customers”, and later claimed that it has paid back all pending claims.
        SEBI has questioned why Sahara chose to pay back the investors on its own when the entire exercise had to be routed through the regulator. “There is no order directing them to pay the investors. They were directed to pay SEBI and SEBI will pay to the investors,” challenged Datar.
        Core to this case is the question whether these investors are fictitious because despite seeking complaints, SEBI has made little headway. That is the reason why its own jurisdiction is weakening. “If the depositors exist, their protection is SEBI’s lookout. If they don’t, the debenture scheme could be doubted to be a money-laundering mechanism,” says lawyer Somsekhar Sundareshan in his recent column for Business Standard. Clearly, Sahara is aware of the limits of SEBI’s jurisdiction.
        The SC had passed its first order last August and SEBI was asked to facilitate the refund. In December, Sahara was allowed to pay the money in three installments, including an immediate payment of Rs 5,120 crore, followed by Rs 10,000 crore in January and the rest by February. Sahara later approached another SC Bench, headed by Chief Justice Altamas Kabir, and received an extension till April, forcing experts to ask, “Can one SC Bench modify the order passed by another?”
        On the legal front, things seem to have reached a point of no return. Sahara has time till 29 April to reply to SEBI’s contempt plea and also for the directors to reply to a SEBI plea to detain them under civil laws. The case is listed for hearing on 2 May. Roy’s counsel CA Sundaram assured the SC that his client would file a reply in a week.
        However there may still be some loopholes that Sahara can exploit. “It’s a mystery why people give money to Sahara. How is it that Sahara is able to trick and not comply with an SC judgment?” asks a New Delhi-based lawyer.
        Time and options are running out for both parties. This case should be tried under the Prevention of Money Laundering Act if investors don’t exist. SEBI can only raise issues and highlight errors but it cannot make an arrest. “Sahara seems to be just buying time and creating confusion and fatigue by jumping courts,” says an expert.
        Last Chance Saloon for Sahara

        Comment

        • #5

          #5

          Re : Many Sahara realty projects stuck; experts pessimistic

          Sahara cannot be trusted any more: Supreme Court

          The Sahara saga continues.Once famous now facing legal, challenges:
          Holding that it was playing 'hide and seek' and cannot be trusted any more, the Supreme Court today directed the Sahara group to hand over title deeds of its properties worth Rs 20,000 crore to SEBI warning that failure to comply would mean Subrata Roy cannot leave India.


          Making it clear that there is no "escape" from depositing the investors' money with the market regulator, the apex court also asked the group to also give valuation reports of the properties to SEBI which will verify worth of assets.

          Read at :Sahara cannot be trusted any more: Supreme Court - The Times of India


          Many investors are waiting to know outcome of this battle.

          Comment

          • #6

            #6

            Re : Many Sahara realty projects stuck; experts pessimistic

            http://www.firstpost.com/business/sa...477.htmlSahara overvalued properties, did not give original titles, Sebi tells SC

            Read more at: Sahara overvalued properties, did not give original titles, Sebi tells SC | Firstpost

            Comment

            • #7

              #7

              Re : Many Sahara realty projects stuck; experts pessimistic

              SC raps Sahara for mockery of its order

              Continuing saga of Shara v/s SEBI.
              Link at :SC raps Sahara for mockery of its order | Business Standard
              Further developments in the Sahara v/s SEBI dispute:
              http://www.firstpost.com/business/sc...y-1242397.html
              SC bars Subrata Roy from leaving India, refrains Sahara from selling property

              Last edited November 21 2013, 05:12 PM.

              Comment

              • #8

                #8

                Re : Many Sahara realty projects stuck; experts pessimistic

                Sahara’s Mumbai plot, valued at Rs 19,300cr, may be worthless - The Times of India
                The case highlights the fact that we should always look at fundamentals before investing.High profile ads and models do not make a business sound.
                Reliance on gimmicks itself is a turn off and warning sign.If product is good we dont need so much of ads and funny terminlogy like managing worker etc.

                Comment

                • #9

                  #9

                  Re : Many Sahara realty projects stuck; experts pessimistic

                  SC directs Sahara to provide details of source of payment to investors
                  Trouble mounts for the group.

                  Comment

                  • #10

                    #10

                    Re : Many Sahara realty projects stuck; experts pessimistic

                    Sahara group claims to create 56,000 jobs - The Hindu
                    Extracts"
                    Sahara group, whose legal battle with SEBI continues in Supreme Court over refund of over Rs 20,000 crore to investors, has made a surprise announcement of plans being afoot to hire over 56,000 new employees this year along with investments to the tune of nearly Rs 32,400 crore.
                    In three-page newspaper advertisements, the group has invited applications for senior positions across business verticals within and outside country and said that these more than 56,000 new jobs need to be filled by the end of 2014.
                    At the same time, it has also claimed that the group, which calls itself Sahara India Parivar, is “committed to creating four lakh salaried positions in next three years.”
                    My view;
                    i would hesitate to apply for any job with them at this moment in time.

                    Comment

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