A rescue plan for Sahara was thrown into disarray, when Spanish bank BBVA SA denied offering a credit line to the bank, scuppering the conglomerate's claims it would use it to help secure bail for its jailed boss.
Sahara, once one of India's most high-profile firms, told the Supreme Court this week that it had secured a 900 million euro ($985 million) line of credit from BBVA, one of several financial deals it said it had struck.
Sahara founder and 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.
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, but the Securities and Exchange Board of India disputes that.
"We have no credit exposure or any relation with Sahara," a spokesman for BBVA said. A senior executive at BBVA separately said 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".
Sahara had submitted a letter in the court written on BBVA notepaper and signed by bank executive Jose Ramon Vizmanos, taking responsibility for the credit it was giving Sahara. But later Vizmanos said that he had no knowledge of the letter.
"I have never worked with any Indian company ... The only thing I know about Sahara is the desert in Africa," Vizmanos said by phone. A Sahara spokesman did not immediately respond to an e-mail and phone call requesting comment.