Madrid - Spain's BBVA SA denied having any credit exposure to Indian conglomerate Sahara, just days after the group told a court it had a line of credit from the bank to secure bail for its jailed boss.
Subrata Roy has been held in jail for more than a year after Sahara failed to comply with a court order to refund billions of dollars to investors in a bond programme that was ruled illegal. Sahara has made several failed attempts to raise the bail money.
The court has set Roy's bail at $1.6 billion, a product of the cost of the bond programme, estimated by regulators to be as much as $7 billion. Sahara has said it has paid most of the dues to the bondholders. India's markets regulator disputes that.
On Monday, India's Supreme Court gave Sahara three more months to raise bail after the company told the court it had received a line of credit worth 900 million euros ($983 million) from BBVA.
The company told the court it planned to use the loan from BBVA to replace a loan from Bank of China tied to its three overseas hotels, which include New York's Plaza hotel and Grosvenor House in London.
Sahara has an outstanding debt of $852 million from the Chinese bank, the company lawyer told the court.
“We have no credit exposure or any relation with Sahara,” a spokesman for BBVA said.
A senior executive at BBVA separately told Reuters on condition of anonymity that the bank was never in talks with Sahara for a loan and that the mention of its name in the court proceedings was a “surprise”.
A Sahara spokesman did not respond to an email and phone call requesting comment.
The Supreme Court has said it could ask a receiver to auction Sahara's assets if it failed to raise bail.
Reuters