Controversial Minister's Gulf Visit

Dubai: The Kerala state tourism and Fisheries minister K.V.Thomas is in the news once again because one of his party members has filed a vigilance case accusing him of amassing huge amount of wealth disproportionate to his known source of income and evading several lakhs worth of stamp duty in dubious property deals in the late 1980s. Amassing several crores of rupees is not an easy task, but to a Kerala minister handling the hot portfolios, it is not that difficult. Recently the honourable minister was touring various Gulf capitals ostensibly to promote tourism. More

CBI probe into Centaur Hotel sale sought - What about Ashoka Hotel Deal which caused similar loss to the state exchequer?

NEW DELHI - February 21, 2004. The CPI (M), a leading left political party in India has demanded a Central Bureau of Investigation (CBI) probe into the dubious sale of the government-owned Centaur Hotel of Mumbai, which, according to the Comptroller and Auditor General report, caused a Rs 145.69 crores revenue loss to the state exchequer. Opening a Pandora's box of corruption and favouritism involving businessmen, politicians and middlemen, the new controversy is an eye opener to various privatization deals made by the Central Government headed by Atal Behari Vajpayee.

Two sides of the same coin Centaur Hotel Bombay - Rs.145 crore loss to government.		Ashoka Hotel  Kovalam Rs.20 crore? How much is the public loss and private gain?

The dubious manner in which the Centaur Hotel was sold off to the Batra Hospitality Private Ltd (BHPL), close to the RSS/BJP leadership was illustrative of large-scale corruption in the disinvestment programmes followed by the central government. Many eyebrows were raised when the hotels division of the Galfar group of Oman was given the ownership of Ashoka Hotels in Kovalam at a throw away price. The Ashoka Beach Resort spread over picturesque 63 acres facing the sea with a chain of enchanting hotels was passed on to the Oman-headquartered Gulfar group headed by a non-resident Keralite for just Rs440 million, it was reported. There was strong protest from various quarters against the sale of Ashoka hotel, which was allegedly a bonanza for the Galfar Group and its Non Resident Keralite Managing Director who has close political links in India.

It is also said that the deal was partially financed with loans taken from various state financial institutions with the help of leading Kerala ministers close to the Non Resident Indian Businessman. Given the current fluid situation revealed in the CAG report about the Centaur Hotel privatization, a thorough probe of similar privatization deals including the Ashoka Hotels which caused much more loss to the government is warranted.

The latest CAG's report confirmed that Rs 145 crores revenue to the public exchequer had been squandered away for a deal of Rs 83 crore- a price on which the Centaur hotel was sold off. Now leading Indian political parties have demanded a Central Bureau of Investigation (CBI) probe to find out the reasons for selling the public property at a throw-away price by the BJP government, which came to power with a clean image. The once popular journalist turned minister Arun Shourie's decision to re-fix the reserve price, when in the first round of bidding interested parties had quoted much below the reserved price, Sitaram Yechuri, the firebrand CPM leader said the turnover levy was reduced from 6 to 2 per cent to sell the hotel to one bidder whose proximity to the Sangh Parivar was known.

Arun Shourie a prominent journalist turned politician has been handling the privatization portfolio of the BJP Government. The BHPL, which had purchased the hotel at a cost of Rs 83 crore resold the same reportedly at a price of Rs 115 crore. The Minister of Disinvestment had earlier dismissed the opposition charges of underhand dealings as fabricated and did not respond to specific charges of acts of omission by the government in the whole deal favouring A L Batra, the owner of BHPL, he said.

However, the Disinvestment Ministe, denied that there had been any "notional loss" to the exchequer on the sale of the Mumbai Centaur Hotel to the Batra Hospitality company, though the property was resold after six months. Reacting to the CAG report on the revenue loss as a result of the deal and the issue having been raised by the Communist Party of India (Marxist), he said there was no way to prevent such re-sales unless a lock-in period is prescribed in the sale deed.

While expressing utmost respect for the CAG's views, he felt that his Ministry would have given answers to the questions raised on the deal if they had been referred to it, than to the Airports Authority of India (AAI). The issue would be taken up with the Cabinet Secretary as well as with the CAG.

Mr. Shourie denied allegations by the Opposition parties that the hotel had been sold to a bidder close to the Sangh parivar. There were originally four bidders. Of them only one was left in the second round. Those in the first round included the Indian Hotels Company of the Taj group, the ITC and Morepen Hotels. As for the owner of the Batra Hospitality, A.L. Batra, he said: "No one from the RSS has spoken to me (about this issue)."

The Minister said the bidding in the first round reached Rs.65 crores and it went up to Rs. 83 crores in the second round. As a result, there was no revenue loss and there could be no way of preventing resale transactions in the absence of a lock-in clause in the sale agreement. Asked about a similar clause in the BALCO sale, he said that had been incorporated due to fears of "asset-stripping" by the buyers. Besides, he pointed to the "collective responsibility" of the Government as the issues relating to the Centaur sale were considered by the core group of secretaries on the basis of recommendations from the financial advisers and then finalised at the Cabinet Committee on Disinvestment(CCD).

He felt the disinvestment procedures followed by the Government were "cast iron" and upheld by the Supreme Court in the BALCO disinvestment case. He stressed that the procedures followed in the Centaur deal were completely transparent and the allegations had been replied to in Parliament. Those raising the issue now were making a "football out of it for the electoral process." On the demand for a CBI enquiry by the Opposition, he said the same people felt the agency could be manipulated, but said anyone could enquire into it including the Chief Justice.

Mr. Shourie noted that his Ministry had come into the picture only after the Civil Aviation Ministry had completed the entire process. At that stage only financial bids had to be called. Initially, only one party had bid, but this was below the reserve price.
Consequently, the CCD had suggested reviewing the terms and the four bidders were informed about lowering of the lease rent and then asked to bid. In the rebidding, the Government was able to garner Rs. 83 crores. The CAG report had said that the failure of the AAI to determine the initial licence rent along with the rate of annual escalation and also reduction of turnover levy from six to two per cent resulted in foregoing of revenue of Rs. 145.69 crores.

Dubai-Muscat-Riyadh link of Kerala Politicians

Keralamonitor.com June 8, 2002.

THIRUVANANTHAPURAM - A leading Contractor approaches the branch manager of a public sector bank in Kerala and asks him to arrange fresh Five Hundred rupee notes worth Rs. 10 lakhs within one day. Without bothering to know the intricacies of withdrawing Fresh Five Hundred rupee notes exclusively by a regular customer , the manager arranges the money. Next day the businessman comes with an empty suitcase and arranges the five hundred rupee notes in it and walks away to an unknown destination More