Continuing Story of Himamuddins in the Gulf
Investigate state financial Institutions' Connection with Ashoka Hotel Deal
KM Editorial June 22 2004
Investigate state financial Institutions' Connection with Ashoka Hotel Deal
Editorial - Latest move to hand over the precious Halcyon castle of Kovalam built by the Travancore Royal family in the 1930s to the Galfar Group appears to be part of a controversial multi-crore corruption deal stuck by a group of politicians, NRI businessmen who act as their benami investors and a prominent BJP leader from Kerala.
The state owned Ashoka Hotel and its surrounding areas measuring 65 acres of strategically important land was "sold" to the Galfar Group of Oman headed by prominent 'award winning' NRK businessman Dr.P.Mohammed Ali for just Rs.43 crores! Any conservative estimate would place the real estate value of the property alone at much above the total transaction. As correctly stated by V.S.Achuthananthan, the opposition leader, the real value of the property exceeds Rs.400 crores.
It is an open secret that a prominent NRK businessman from Muscat is a close business associate of Muslim League leader and the State Industry Minister Kunjalikutty, said to be the real brain behind many multi-crore projects in Kerala. After losing all the seats in the recent elections, the desperate mood of such UDF ministers like Kunjalikutty to speed up various "deals" is understandable. Anyway time is running short and the transactions should be fixed before leaving their crucial chair.
As earlier reported by KM, a week before the Ashoka hotel deal was announced in the media K.V.Thomas, the state tourism minister was living in the luxurious private villa of the businessman in Muscat. Not only Thomas, a coterie of other decision makers including the former Civil Aviation Minister who were involved in taking the privatization decision were wining and dining in Muscat. "It appeared that they were enjoying a pleasure trip," said a journalist who was bewildered by the minister's mysterious presence in Muscat. As correctly pointed out by Achuthananthan, two ministers in the Antony cabinet are pulling strings to transfer the ownership of the palace worth an estimated Rs.500 million to the Galfar group.
KM had earlier reported that while the CPM leader Seetharam Yechuri raised serious questions about Ashoka Hotel Bombay deal that favoured a senior businessman with BJP sympathy, the Kerala leadership of CPM was maintaining a studied silence. Achuthananthan, a sincere opposition leader has been studying various aspects of the corruption deal by visiting the controversial hotel palace site. He has rightly concluded that the entire deal appeared mysterious and illegal, his Parliamentary party leader and CPM Secretariat member Kodiyeri Balakrishnan was engaged in a "secret" mission to Muscat via Dubai without the knowledge of even senior leaders of Kairali Club, an association guided by the party. Except a senior party leader of the Pinaray group, a close confident of the some prominent NRK business group, no one was aware of the visit. Sources knowing the secret hotel deal said the Ashoka Hotel was obtained at a throw away price by "influencing" many people in New Delhi and Kerala.
A former BJP Minister from Kerala has played an important role in brokering the deal. "When the media pressure was mounting, we found the right people in New Delhi and there was no problem in transferring the property. Now that there is a change of guard at the center, new questions are raised about the dubious deal," said source. Efforts are on to silence CPM critics by luring the Manichan section - read the pro business lobby group. The secret mission of Kodiyeri in Muscat has raised many eyebrows as even the party cadres were unhappy about his hide and seek approach. Paradoxically enough the car in which Kodiyeri was touring Muscat was identified as belonging to the brother of a retired Galfar staff now living in the state capital.
The Galfar group claims that they have all the "documents" for the possession of the land and the buildings in the area occupied by them. "There is no document available in any of the offices to prove the existence of a dispute or illegal possession of the `illegal' property," Abdul Basheer, Director of the Group's Operations said at Kochi the other day. Dr.Mohammed Ali, winner of prestigious Pravasi Bharathi Award, has been an expert businessman who could easily convert public institutions into private property in a smart way. (More)A close look at the innovative manner in which he has converted an Indian community school in Al Ghubra (Muscat Oman) under the mandate of Indian Embassy, into his private ownership business tells volumes about his smart modus operandi. As revealed by KM investigative reports, the Indian School Al Ghubra was converted into a private business by "influencing" various decision makers including a former Indian ambassador Renjit Gupta who managed the entire deal in return for some favours. The "legal document" to claim the school ownership was nothing but a so called agreement on a white paper without any official sanctions from Oman's Ministry of Education. For more than a decade, Mohammed Ali's ownership claim was based on this piece of fabricated and manipulated paper.
In public eyes, the school belongs to Dr.Mohammed Ali. But in reality it is a community school. Nobody knew about these facts until KM disclosed them through this website. Dr.Mohammed Ali continues to make millions from the school by charging the highest fees charged by any Indian schools in Oman or perhaps the entire Gulf. He controls the "private school" with the help of politicians like E.Ahmed, the new Central Minister of the Muslim League, whose son Raeez Ahmed is the school president. K.M.Meena the former Indian ambassador in Muscat who raised objections to the illegal control over the community school and high fee structure was prematurely transferred under their influence. A new puppet ambassador, close friend of E Ahmed was brought in to avoid any such problems in future. And the show is going on and several crores smoothly flow to the private businessman's pocket. E Ahmed must have traveled maximum number of times to the Gulf region. As soon as he assumed office, his foreign tours started! (More on schools corruption)
Similarly, the palace in question was constructed as a summer leisure home for the royal family members by regent Maharani Sethulakshmi Bhai. It is argued that ITDC had the possession of the palace along with the Ashoka Hotel building. Is there any such "white paper agreement" to substantiate these claims? It is easy to convert public institutions into private property, if one has the blessings of politicians like Kunjalikutty, E.Ahmed or other smart politicians. The controversy over the palace hotel deal reminds us once again that even though the traditional royalty has disappeared, a new form of royalty is posing major challenge to established democratic norms. "The certificate of possession of 64.5 acres of land by the ITDC is available with us. The certificates include the ownership of the place," he claims. Why did the state government agreed not to stake any claim on the palace? It is learned that the industry minister had pushed many new "rules" to facilitate NRI investment in privatization properties. Is it not necessary to look into various crucial decisions made by Kunujalikutty as the industry minister to facilitate the hotel deal? What was his role in the hotel deal? What was K V Thomas doing in the private villa of Dr.Mohammed Ali in Muscat a few days before the deal was finalized?
While the law enforcement authorities in Muscat are "looking" into various deals by some prominent Indians there, it is worth examining whether the state financial institutions coming under Mr.Kunjalikutty had any role in funding the hotel deal. According to an Ashoka hotel employee, the entire deal was nothing but paper transactions as the real funding came from some public financial institutions. He said the smart operation is made in such a way that a historically important public property has been converted into a private asset by using public financial institutions money. The income flowing from the hotel property is used to repay the liability over a period of time! What a smart and sharp business acumen! the same way Dr.Mohammed Ali converted a community school in Oman into his private business! (More on Indian School News from Gulf)
Another plum project eyed by the same coterie is the multibillion Express highway project, which was conceived, planned and decided in the Muscat office of Galfar group. The so called GIM meeting and other public relation exercises were nothing but public gestures to justify the shared business plan. The PWD Minister Muneer's hurry to implement the project is also understandable. Given his track record in converting some of the government rest houses to some unknown NRIs from the Gulf for long term lease, Muneers investment in the multi crore Television channel are to be focus of public scrutiny. His dubious plan to lease out Trivandrum Club, the Tata Tea and government rest houses is also to be focus of a thorough investigation. While a heated debate is going on about the new Gulf Malayali royal families who dictate terms to the state government, the vast majority of NRKs are unlimike the handful of tycoons who collaborate with corrupt politicians as benami operators.
K M E X C L U S I V E
Mohammed Ali wins multicrore Express Highway project in Kerala
Thiruvananthapuram - February 13, 2003 A multi crore Access Controlled High-speed Corridors project connecting Kasargod and Thiruvananthapuram in Kerala is likely to be awarded to the prominent Non Resident Indian businessman Dr.P.Mohammed Ali. One of the richest Indian in the Gulf, Mohammed Ali who had a humble beginning from Oman has been a successful businessmen. More
‘Halcyon’ castle no longer Halcyon
THIRUVANANTHAPURAM, June 20: The Halcyon castle at Kovalam, built by the Travancore royal family in 1930, is in the thick of a controversy over the Kerala Government’s move to hand over the building to a private hotel management.
The owners of the Kovalam hotels adjacent to the castle, which was bought by the Galfar group from the ITDC Ashoka chain of hotels, claim that they are the natural claimants of the 64.5 acres of land and buildings around the hotel.Opposition leader V S Achuthanandan, who visited the site yesterday said the entire deal was ‘mysterious’ and the palace should be protected as a ‘historical monument.’
The Galfar group says they had all the documents for the possession of the land and the buildings in the area occupied by them. "There is no document available in any of the offices to prove the existence of a dispute or illegal possession of the `illegal’ property," Abdul Basheer, Director of the Group’s Operations said at Kochi the other day.
The palace was constructed as a summer leisure home for the royal family members by regent Maharani Sethulakshmi Bhai. The official claim that ITDC had the possession of the palace along with the Ashoka Hotel building was hollow as they had no document to prove it, sources opposing the hand-over said.
The ITDC had only the possession of 16.47 hectare land and the building in the area. Kovalam palace and the 4.21 hectare area around it had been marked as ‘adverse possession’.
With the outbreak of the controversy, Chief Minister A K Antony has said that the Law and Tourism Ministries were examining who were the real owners of the castle. According to Achuthanandan, the sale of the ITDC Ashoka beach resort citing financial loss itself was mysterious. The hotel complex on a 16.47 acre plot, was worth around Rs 400 crore, which was sold for Rs 43 crore to the private group.
The seaside castle, which had been the haunt of former Maharajas of Travancore, came into the hands of the Government with the end of the royal power. It was worth around Rs 50 crore and it could not be transferred to a private individual who purchased the ITDC hotel, he said. He wanted the castle to be kept as a ‘historical monument’ reflecting Kerala’s cultural heritage.
While constructing the Ashoka beach resort, the Halcyon palace and adjoining land had not been handed over to the ITDC, sources said. The Kerala Government is sure to have a tough time settling the row as the Galfar group has also come out with the charge that a private management who had illegally occupied the land ‘in their possession’ were creating a hue and cry to protect their interests. (Courtesy : PTI)
Earlier Reports
Centaur Hotel Privatisation Caused Rs.145 crores loss to Government as Sangh Parivar is busy engaged in selling profit making public sector companies at throw away prices.
Ashoka Hotel Deal with Oman based group also caused multicrore 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.More
Centaur Hotel Privatisation Caused Rs.145 crores loss to Government as Sangh Parivar is busy engaged in selling profit making public sector companies at throw away prices.
Centaur Hotel Bombay - Rs.145 crore loss to government. Ahoka Kovalam, a property worth more than Rs.100 crores was sold hurriedly to an NRI Businessman. What role did the state industrial and financial institutions play in the dubious deal to sell a central government asset to a private party? Ashoka Hotel Kovalam Rs.20 crore? How much is the public loss and private gain? A thorough probe will reveal how much money is spend to acquire a pemium property at throw away price read moreAshoka Hotel Deal with Oman based group also caused multicrore 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.More
Centaur Hotel Bombay - Rs.145 crore loss to government. Ahoka Kovalam, a property worth more than Rs.100 crores was sold hurriedly to an NRI Businessman. What role did the state industrial and financial institutions play in the dubious deal to sell a central government asset to a private party? Ashoka Hotel Kovalam Rs.20 crore? How much is the public loss and private gain? A thorough probe will reveal how much money is spend to acquire a pemium property at throw away price read moreControversial 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
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.
K.V.Thomas, third from left in the Gulf
Was tourism promotion the only purpose of his Gulf tour? Was it really to sell Kerala as a tourist destination through a tourism festival which will be held sometimes by the end of 2002 or was he trying to engage in some more property deals in Kerala, with the Gulf based Indian tycoons?
According to sources, during a crucial Gulf tour recently, the Kerala state tourism and fisheries minister along with the central minister for civil aviation was in major Gulf capitals. During this meeting, they were reportedly wining and dining with a number of Indian businessmen, who had keen interest in some of the major privatisation projects in India. The ministers were part of the tourism promotion delegation.
Marketing Kerala abroad? Minister K.V.Thomas with Padmaja.
At a time when chief minister A.K.Antony is cautious about the state financial health, how come that all his cabinet colleagues keep visiting the Gulf countries one after another? There must be something that attract all the Kerala ministers to the Gulf capitals. Did K.V.Thomas and other Central Ministers who were involved in taking crucial decisions met any of the bidders and what was the purpose of such a meeting just before taking important decisions? The Minster left without meeting any of the social organizations there. What was he doing in a leading Indian businessmen's private villa in one of the Gulf capitals?
The ongoing controversy in Kerala is all about the dubious land deals with hotel groups through which he has amassed several crores worth of property, alleged K.V.Babu in a vigilance case. A dubious land deal with BRJ Hotels was conducted in the late 1980s when he was only a Member of Parliament. According to reports, the land surrounding the National High Way at Kanayannoor Taluk, Marad Village was bought and sold to leading investors who created an international convention centre, a leading international five star Hotel chain and other major multinational companies on the property.
Recently the Minister was roaming around all the major international capitals to market his so called Vision 2025 tourism plan to develop Malabar coast as a tourism spot. Has he planned any major land deals in the Malabar coast, where a number of international hotel chains will be coming up? A number of Kerala politicians including a former Chief Minister have made big money by purchasing property from the locals at Nedumbassery area at the rate of a few thousand rupees just before announcing the plans for the new International Airport project. Once the project was announced, the land prices skyrocketed and they managed to sell the same property at as high as Rs.50,000 per cent to make millions. Is it all part of a major conflict within the ruling coalition to share the family silver among themselves?
A number of business groups have keen interest in obtaining some of the prime property in different parts of Kerala, especially Kochi owned by some of the so called loss making public sector units. One of the government owned company has got more than four thousand acre of land and going by the real estate price alone their book value will be much lower than their real market value. The scramble among politicians, ministers and businessmen is to get such properties at throwaway prices by bribing the ministers, bureaucrats and political leaders.(keralamonitor.com)
