New Delhi, August 12
In a first major step, the CBI has registered two preliminary inquiries into the alleged irregularities in the sale transactions of Hotel Juhu Centaur, Mumbai and Hotel Airport Centaur, Mumbai of Hotel Corporation of India Limited (HCIL) during the previous NDA government.
The preliminary inquiries, which is a prelude to registering regular cases, were registered on the basis of the documents provided by the Department of Disinvestment, CBI sources said.
While the preliminary inquiry relating to Hotel Juhu Centaur was registered yesterday, the inquiry against Hotel Airport Centaur was registered today, sources said.
Both the inquiries have been registered against “unknown public servants” of the then Ministry of Disinvestment, the Ministry of Civil Aviation, Air India, Hotel Corporation of India Ltd and others, CBI sources said today.
Both the hotels were disinvested during the previous NDA regime and the Disinvestment Minister was Arun Shourie. Refuting any irregularites in the disinvestment of these two hotels, Mr Shourie has already announced that he would cooperate in any kind of probe, including by the CBI.
“The inquiry regarding the transaction of Hotel Juhu Centaur was instituted yesterday following the initial scrutiny of the material which indicated that there was inadequacy in the efforts of the then government in generating competition besides inconsistencies in assumption made for the valuation of the hotel which appear to be on the lower side due to the assumption of higher costs of debt and equity,” they said.
Expression of Interest were received from 20 parties, of which three did not quality and 16 withdrew later. Only one party, Tulip Hospitality Services, remained in the fray. The hotel was subsequently sold to this company for a sale consideration of Rs 153 crore in March, 2002.
It is alleged that the Chairman of this Company is Ajit Kerkar, who was also a member of the Board of Directors of Air India besides of the sub-committee formed for disinvestment of HCI Hotels during 1998-99.
It was also found that there was no adequate scrutiny of the financial strength of the bidder, repeated extensions were allowed to the successful bidder for final payment, bank guarantee was not encashed despite breach of terms and conditions and no interest was charged on delayed payments.
It is further alleged that when Tulip Hospitalities Services was unable to raise finances to make payment, the Ministry of Disinvestment intervened and helped the company to raise funds through various nationalised banks, LIC and others.
The inquiry regarding the disinvestment of Hotel Centaur Airport has been registered on the basis of several suspected allegations revealed during scrutiny of the material CBI sources claimed.
It has been alleged that adequate efforts were not made to generate competition and the sale transaction was finalised on the basis of single bid.
The HCI, owner of Hotel Centaur Airport and Airports Authority of India (AAI), owner of the land on which the hotel was constructed, entered into a 30-year lease agreement in December, 200, to facilitate the disinvestment process.
It has also been alleged that a lease agreement was entered into between the HCI and the AAI at a lower lease rent rate than the prevailing market price resulting in a likely loss of Rs 58.44 crore to the government.
Against the reserve price of Rs 76.2 crore, sale bid submitted by the bidder Batra Hospitality was Rs 65 crore. Hence the bid was not accepted.
The evaluation committee, in January, 2002, had instead of fixing the reserve price at the base case value fixed the reserve price at the minimum range of Rs 78.3 crore.
