In a new twist to the high profile Sebi-Sahara case, the Indian capital markets regulator Sebi has approached a US court with a $12-million claim on proceeds from sale of a corporate jet owned by a Sahara Group firm.
The court has rejected the demand for now, saying that Sebi could not "properly file a claim prior to the Bar Date and in accordance with the terms of the Court's order".
The Indianapolis court is looking into disbursement of money collected from the aircraft sale that was triggered by a litigation. It ruled however that the court-appointed receiver can initiate wire transfers from the escrow account to Sebi-Sahara Refund Account after being satisfied with the validity of the demands.
This bank account was created after a Supreme Court order in August 2012 for refund to bondholders of two Sahara group firms, which were asked to submit over Rs 24,000 crore with the Securities and Exchange Board of India (Sebi) for making repayments to investors.
While Sahara claims to have already made over 95 per cent of repayments directly, this has been disputed by Sebi and the group chief Subrata Roy has been in jail for more than a year.
The present case in the US relates to an Airbus Corporate Jet, a green aircraft purchased by Sahara group's Hospitality Business Limited (HBL) from Airbus SA in December 2012.
HBL then entered into a Cabin Completion Agreement (CCA) with US-based Comlux America for $31 million. Comlux is a leading player in providing aircraft management and design services for VIP customers.
However, due to liquidity issues faced by Sahara, after being asked to deposit funds with Sebi, the payment timelines could not be met and delays started to occur, due to which Comlux could not progress with the cabin work of the aircraft.
As a result, HBL was asked to pay damages worth an estimated $6 million to Comlux. While HBL paid $3.795 million, the balance amount remained outstanding.
Later in June 2014, Comlux's attorneys filed a case in the Indianapolis court and sought sale of the aircraft.
Subsequent to this, Eagle Creek Aviation Services was appointed for sale of the aircraft. It was sold to Hua Yuan International Development in December 2014.
The sale proceeds were kept in an escrow account, from which payments were made including towards Comulux's damage and certain fees, while claims were invited from other parties under till a 'Bar Date' of March 1, 2015.
As per the court documents, the receiver on March 6 informed the court that it has been approached by Sebi with a claim against the funds held in this account and with a request for not making any payments pending orders from the Supreme Court of India.
Besides, the receiver also got a communication from PremiAir Aviation International with a claim of over $17.7 million, plus interest, against the funds in the escrow account.
Subsequently, a hearing was held on March 23, 2015, to look into the claims and objections, as also about the distribution of funds from the account.
The receiver later got a communication from Sebi, wherein the regulator "requested the residual amount of $12 million (after deducting legal fees and the claim of PremiAir Aviation) to be wired to Sebi-Sahara Refund Account".
In its latest order, the court observed that HBL has "agreed that the funds in the Interpleader Account may be largely distributed to PremiAir and Sebi".
"HBL has indicated that it would prefer that the Receiver wire the funds to PremiAir and Sebi directly," it said.
Subsequently, the court ordered that "neither Sebi nor PremiAir properly filed a claim prior to the Bar Date and in accordance with the terms of the Court's order and notice or otherwise under Indiana law, and any purported claim on behalf of Sebi, PremiAir or any other potentially interested party is hereby denied".
It further ruled that "once the Receiver is satisfied with the validity of the demands made by PremiAir and Sebi, he is authorised to initiate those wire transfers from the Interpleader Account in the amounts finally provided by HBL, subject to the Receiver's concurrence.
"The wire transfers from the Interpleader Accunt are approved to be made directly to PremiAir Aviation International and the Sebi (payable to Sebi-Sahara Refund Account) and to HBL's attorneys for their fees incurred in connection with their work on their receivership and how the funds held by the Receiver are to be distributed", the court said.
The court also approved the receiver's fees.