India's Sahara uses small savers to keep hill resort afloat

Mumbai

INDIA'S embattled Sahara conglomerate has been funnelling cash from small savers to fund one of its biggest projects, a luxury resort south of Mumbai, according to documents Reuters reviewed.

Sahara has ploughed at least 15 billion rupees (S$315 million) from two of its credit cooperatives into the Aamby Valley resort project through investments in preference shares, according to documents filed with India's companies regulator. It is doing so as some investors in its credit cooperatives complain they have struggled to get Sahara to pay out their matured time deposits - even for sums as low as 30,000 rupees.

The credit cooperatives' investments into Aamby Valley are not illegal. Cooperatives are allowed to invest in shares and bonds of infrastructure and real estate companies after board approval, if they are in the interest o…