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Monday, Aug 11, 2014

World

Indian tycoon gets jail cell cum office to raise bail

Reuters | Monday, Aug 11, 2014

ASSET: Roy intends to sell New York's Plaza Hotel (above) and two other hotels; he needs S$2 billion to secure his release.

NEW DELHI/MUMBAI - It's hardly the US$30,000 (S$38,000) a night royal suite, but after five months in India's biggest jail, the owner of the New York Plaza and London's Grosvenor House is thrilled to be able to use a modest office as he tries to sell the iconic hotels.

Indian tycoon Subrata Roy is putting up the two trophy properties and another luxury New York hotel for sale to raise US$1.6 billion for the bail bond that will get him out of Tihar, a sprawling New Delhi prison complex that houses about 12,000 inmates.

About a minute's walk from the headquarters of the prison, Roy now has a 56 sq m office where he can hold video conferences and receive visitors to try and sell or mortgage the hotels, say prison officials. In a small adjoining room, there are three beds for Roy and two associates who have also been jailed.

"They are happy, they can now talk to known people all day,"said one Tihar official, who described the set-up to a reporter visiting the prison. "He is very satisfied with the arrangement."

According to the official, Roy told a senior prison officer after moving to the new office-cum-cell that "our work will be done now".

It is a race against time for the 66-year-old head of the Sahara conglomerate: Under a deadline set by the Supreme Court, Roy has just a few days left to post the 100 billion rupees (S$2 billion) in cash and bank guarantees that would secure his release.

Roy was jailed in March after he failed to appear at a contempt hearing in the long-running dispute with the capital-markets watchdog over the company's failure to repay billions of dollars to investors who were sold outlawed bonds.

He has yet to be charged over the dispute and denies any wrongdoing. His Sahara group has vast real-estate, media and hotel interests, and partly owns a Formula One team.

One asset that could raise quick cash is the landmark New York Plaza Hotel - a 107-year-old luxury property that overlooks Central Park. Its 4,490 sq ft Royal Suite has three bedrooms, three bathrooms, a dining room for 12, a kitchen, a gymnasium, a grand piano and a library. It costs US$30,000 a night.

Sahara bought the Plaza for about US$570 million in 2012. Two years earlier, it paid £470 million for the 494-room Grosvenor House, opposite Hyde Park and just a stone's throw from Buckingham Palace. Sahara is also seeking to sell the Dream Hotel in New York's midtown Manhattan.

Industry consultants said trying to sell the hotels from inside a prison was unlikely to dampen the appetite of buyers for the prestigious New York and London hotels.

"The properties are quite iconic and would be sold at the right price," said an international property consultant who did not wish to be named. "Whatever Roy does, he does it in style."

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