India's Sahara Group is reportedly in frantic discussions with a Chinese lender as it struggles to hold on to its prized hotel properties around the world, including the Grosvenor House Hotel in London.
The Group, one of the country's largest business conglomerates with interests in finance, real estate consumer goods, media and entertainment and the main sponsor of the Indian Cricket team, has been embroiled in a protracted and expensive battle with Indian financial regulators after being accused of defrauding some 30 million shareholders of more than £2.3 billion.
The company was ordered to refund the investors by India's Supreme Court last year following an investigation by the Securities and Exchange Board of India (SEBI).
The Economic Times reported on Monday that Subrata Roy-owned Sahara Group, who are also the main sponsors of the Indian Cricket Team, has entered into talks with the state-owned Bank of China over the bank's exposure against hotels owned by Sahara, including the Grosvenor House, a popular location for South Asian events including the Asian Achiever's Awards in the last several years.
The bank's total credit facility against Grosvenor is said to be £305 million, the report said.
The Chinese bank is said to be concerned about a demand by SEBI to provide the Grosvenor House Hotel as a "security buffer" until Sahara has paid off its dues to investors in full because the property may have been acquired by funds raised in India.
Sahara India acquired the Grosvenor House hotel in December 2010 from The Royal Bank of Scotland Group for nearly half a billion pounds.
A Sahara spokesman confirmed to the Economic Times that Bank of China officials were concerned but that talks were continuing in London.BLOG COMMENTS POWERED BY DISQUS