Subrata Roy, the boss of the Sahara conglomerate, is in a New Delhi prison on contempt-of-court charges and needs to post $1.6 billion in bail to get out. To help raise the money, Sahara is in talks to refinance its overseas hotels, including New York's Plaza.
The only problem: The man who was orchestrating the latest deal, a 34-year-old former broker named Saransh Sharma, forged the letter intended to support a $2 billion transaction.
Initially, Sahara's head of corporate finance, Sandeep Wadhwa, said Sahara's lawyers had verified with Bank of America that Sharma has deposited just over $1 billion in an account at the bank that is "earmarked for the said transaction."
That account, however, didn't appear to exist. A manager at the bank said that he didn't write a crucial document attributed to him: an email, sent in his name to Sahara, which purported to verify the account's existence. After Reuters asked the bank to look into the account, spokeswoman Jumana Bauwens issued a statement saying: "Bank of America isn't involved in the transaction."
What's more, Sharma, who lives in San Jose, California, had admitted to stealing a database from a former employer. There were also two pending lawsuits against him alleging he forged a letter and produced fake documents to obtain a loan.
Bank of America's assertion that it had nothing to do with the deal, as well as details about Sharma's past, led to Sahara admitting in a statement late on Thursday that it had found out that the Bank of America letter, submitted by Mirach to the Supreme Court as a proof that it had set aside "sufficient funds" for the transaction, was forged.
Sahara said it had asked its lawyer in London to visit the Bank of America branch in Los Angeles and verify it: "We have now received the report ... it was a forged letter," the company wrote in a statement.
Though Sahara did not specifically confirm deal talks had now been called off, it said it would take initiate civil and criminal legal proceedings against Mirach and its officials in India and in the United States for "reckless conduct."
Roy is being held at Tihar jail, the largest in India, on contempt charges for failing to comply with a court order to repay investors in a bond scheme later ruled to be illegal. The bail amount, the largest ever in India, reflects the cost of the illegal scheme, estimated by Indian regulators to be as much as $7 billion.
Image: Subrata Roy, chairman of Sahara India Pariwar, was splashed with ink when he headed to court on March 4, 2014 to face the charges that ended up landing him in jail. Now, he is waiting for a prospective saviour who can ink a deal that could free him.