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, the Supreme Court of India 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 e-mail 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.