India's Sahara Group buys iconic Plaza Hotel

NEW DELHI - Flamboyant Indian billionaire Subrata Roy has finalised the purchase of New York's landmark Plaza Hotel for US$575 million (S$704 million), it was announced Wednesday.

Roy's Sahara group, a top sponsor of Indian cricket and motor racing, has also bought the luxury hotel Dream New York from hotelier Vikram Chatwal for US$220 million, India's Economic Times reported. Both deals were closed Monday.

The hotels lie close to Central Park and Sahara, which bought Grosvenor House hotel in London two years ago, is reportedly looking at other landmark properties to build up a luxury hotel portfolio, the Economic Times said.

The 223-room Plaza "was a great opportunity for the buyer to expand into a key US gateway market with the purchase of such an irreplaceable asset", said consultant to the sale, Solid Rock's President Greg Rice.

Sahara bought the Plaza, whose guests have included Eleanor Roosevelt, the Beatles, Mark Twain and Groucho Marx, from an Israeli-owned realtor El Ad US Holdings in a deal valued at $575 million, the vendor said in a statement.

Co-owner Kingdom Holding, a leading global investment firm controlled by Saudi billionaire Prince Alwaleed bin Talal, will retain a 25 per cent stake.

The purchases come as Sahara faces an Indian Supreme Court order to refund as much as US$4.5 billion collected from 30 million small savers for failing to adhere to regulatory norms.

If Sahara does not pay investors by the end of the month authorities should use all means possible to reclaim the money, including freezing the company's accounts, the court said. Sahara has sought an extension to the deadline.

The Sahara group, known as a reclusive entity, did not make any announcement of its own on its acquisitions.