K E R A L A M O N I T O R . C O M EXCLUSIVE May 10 2005 More about Centaur
What CAG report did not say.....
Casino Group Planned Rs.100 Crores bid for Kovalam
Galfar bid was Rs.55 crores less than the Casino group's Kovalam bidding plan with KSIDC.
THIRUVANANTHAPURAM - The dubious role of Arun Shourie and the Previous Government in the Centaur Hotel privatization deal has received national attention because the minister has allegedly acted in a hurry to help one private party closely linked to the saffron brigade. According to the Comptroller and Auditor General of India report, all the potential bidders to the Centaur hotel were systematically eliminated to favour the beneficiary company, which made a killing by immediately selling the same hotel at several fold the purchase price within six months of the deal. The buyer of the Centaur Airport Mumbai, Batra Hospitality sold the property to the Sahara India Group for Rs 115 crore (Rs 1.15 billion). Batra Hospitality had bought over the hotel, along with flats and petrol pumps for Rs 83 crore in February 2002. Within six months the value of the property has gone up by 30 crores!
The NDA government as part of its big ticket divestment programme had privatised the ITDC-owned Centaur Hotel to Tulip Hospitalities which was then opposed by several political parties, including Shiv Sena, for alleged undervaluation of the property. The Congress and Left parties have been demanding an inquiry into the divestment. The latest CAG report strengthened the conspiracy theory to sell the hotel property at a highly discounted rate by systematically eliminating rival bidders. A.L. Batra, owner of Batra Hospitality Pvt Ltd, sold the the 288-room Centaur Mumbai five-star Centaur Hotel Airport property in Mumbai, which he had acquired from Air India's subsidiary, Hotel Corporation of India (HCI), in June 2001 for Rs 83 crore, to the Sahara India Group for Rs 115 crore. The land on which the property is located belongs to the Airports Authority of India (AAI), which had given it on lease to HCI for building and operating the hotel for a 30-year period. When the hotel property was sold, AAI had changed the land lease deed in favour of Mr Batra, the new owner.
The CAG has slammed the disinvestment department for selling the two hotels of Air-India subsidiary Hotel Corporation of India - Juhu Centaur and Airport Centaur - on the basis of single bids without the benefit of competition. The Cag stated that in neither of the two sale transactions was it evident that efforts were made to balance the need and urgency of selling the properties and obtaining the best possible price. The report said the valuation of the properties and fixation of reserve price was unfair. Earlier CAG reported that the state incurred a loss of Rs 145.69 crores to the exchequer. As rightly pointed out by Sitaram Yechury in a statement, a lot of underhand deals were struck. The hotel privatizations were classic sweetheart deals, where public property was sold at a low price to people close to the ruling establishment. The CAG has pointed out that because of the undercharging of lease rent and deduction of turnover levy in the sale of the hotel, there has been a revenue loss of Rs 145.69 crore to the exchequer.
According to the CAG n case of Juhu Centaur, three parties were disqualified. 16 withdrew leaving a solitary bidder, M/s Tulip Hospitality Services Private Ltd in fray.In case of Airport Centaur, four were disqualified, 13 withdrew and the remaining four carried out due diligence exercise. However only one bidder, M/s Batra Hospitality Private Ltd, submitted the financial bid. And now read how Galfar emerged as the successful biddeer for Ashoka Kovalam with just 45 crores for a property, which according to experts, is worth ten times that bid figure.Al though there were 20 expressions of interest for Kovalam Ashok, only five bids were received!!! Read below to see how the bidders were systematically.. eliminated. Lalit Suri of Bharat Hotels, BPL and a business group in Kerala were some of the bidders for the Kovalam Ashok.
NDA ministers got kickbaks in hotels disinvestment: Nirupam
"Few NDA ministers had got kickbacks in the sale of the government hotels belonging to Hotel Corporation of India and Indian Toursim Development Corporation (ITDC), including Juhu Centaur in Mumbai," Nirupam, a former Shiva Sena leader who joined Congress says. Nirupam further said all the hotels that were disinvested during the NDA rule were undervalued.. ..Full Report
Casino Group of Kochi Planned Rs.100 Crores bid for Kovalam Palace Hotel
Now take a look at the Kovalam Hotel deal in which both the central and state governments were deeply involved. The Muscat based Galfar Group took over the hotel in what is said to be a competitive bid as the M-Far bid emerged with the best offer price - Rs.45 crores. Despite the fact that the hotel was sold for peanuts to the Galfar group, which is well known for its close proximity to the then Industries Minister and Muslim League leader P. Kunjalikutty, the bidder started claiming the adjacent properties too!
Dr.P. Moahammed Ali has been a close associate of the former League Minister. In the case of Kovalam hotel, there were many parties interested in acquiring a prime property located strategically in a state which has already established as a leading tourist destination in the world. Through a systematic planning, a profit making hotel was turned red within a few years of smart operation. (Pic above: Jiji Thomson IAS shunted out of KSIDC for trying to be a costly bidder than M-Far). The latest revelation from a source close to a leading Hotels group in Kerala is that they planned to bid for the Kovalam Palace hotel with a competitive price of Rs.100 crores - Rs.55 crores more than the Galfar offer. "The CASINO group of hotels, the number one hotelier of Kerala, and Kerala State Industrial Development Corporation (KSIDC) jointly decided to bid the hotel in 100 crores. However, Kunajlikutty, the Industry Minister used his influence and fired the KSIDC staff including Jiji Thomson, the then Managing Director of KSIDC . Finally the KSIDC -CASINO joint venture was abandoned and what happened next is history. Jiji Thomson who was in the forefront of the much publicised Gulf Investors Meet (GIM) was later shunted from KSIDC, which had multicrore budget to an insignificant department like NORKA which has just less than Rs.3 crores budget. "Jiji Thomson, the then Managing Director of KSIDC, was keenly interested in the joint venture proposal with the Casino group. However, he was fired by Kunjalikutty and shifted to the less significant NORKA Department," said sources close to the deal.
As Managing Director of KSIDC, Jiji Thomson initiated the joint venture with the Kochi based Casino hotels, reportedly the number one hotel group in Kerala. After he was transferred from KSIDC Managing Directors post, the IAS officer was confined to the Secretary for NORKA. As an IAS officer he has also held the posts of Palakkad Collector, Revenue Secretary and Civil supplies Director. He had also a major role in organizing the Gulf Investors Meet (GIM). The state government also introduced a new post Executive Chairman above him for KSIDC operations. As a State public sector undertaking, the chief executive of the KSIDC, as per the rules and procedures, has been its managing director. Till then KSIDC was authorised only to have a part-time chairman. The Casino group of hotels, now knonw as GH Earth is the pioneers of resort/holiday tourism in Kerala. Jose Dominic, chairman of the Casino group of hotels was keen to acquire the Kovalam Palace hotel, offering a better price than the Galfar offer. (Pix: Dominic Jose, Chairman, Casino Group).
The Kochi-based Casino group, now known as CGH Earth, has strong presence in the tourism and spices trade later took over the Kollengode palace in Palakkad, which is associated with centuries of history and unique Kerala style architecture. The group planned to convert the heritage property into an exclusive ayurveda resort for the upper crust tourists. The group took the palace on a 45-year lease from the inheritors who are spread over in Chennai, Bangalore and Atlanta, US. The plan was to revive the palace to its lost days of glory and open it for tourists during the coming season. The group had similar plan to bid for the Kovalam Palace with Rs.100 crores bid. Casino Group of Hotels is a leading hospitality name in South India. The Group owns prime hotel properties like he Casino Hotel, Brunton Boatyard, Coconut Lagoon and Spice Village. Coconut Lagoon is a CGH Earth Group Enterprise now synonymous with Kumarakom and backwater treasures of Kerala. It is an up market resort visited by Indian artists, business executives and cricketers while foreigners. The group is a direct competitor to Le Meridian Hotel in Kochi, one of the first five star hotels in the state owned by the Galfar group. Since its incpetion it is widely rumoured that the real ownership rests with a politician.
Now new Ordinance to Take Over Kovalam Hotel... and Pay Compensation for the loss?
The State Governor on Monday promulgated an Ordinance taking over the controversial Halcyon Castle and 4.113 hectares of land appertaining to it from the M-Far Hotels at Kovalam. The M-Far group, an outfit of the Muscat based Galfar group, will be paid compensation for any improvements made to the castle while it was in their possession. The Kovalam Palace (Taking over by Resumption) Ordinance specifies that a Commissioner should be appointed for this purpose. The High Court had earlier annulled an executive order issued by the Government taking over the castle and the land. The castle had come into the possession of the M-Far group following sale of the properties of the India Tourism Development Corporation at Kovalam to it. Why an ordinance now? because Ooommen Chandy does not want to repeat the Centaur controversy in Kerala..That also when the Karunakaran faction is keenly watching the situation.. And may be a hefty "compensation" to the Kovalam Ashoka owner!!! As rightly said by V.S. Achuthananthan, the crusader against corruption, Oommen Chandy is afraid of the M Far group and its Chairman. I feel Chandi will urinate at the mention of M Far Mohammed Alis name..However, there are other friends in the party ..who frequent the Gulf region secretly...Pinarayi,, Kodiyeri. and other comrades...to give a few prominent names.
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. Full Report
Dubai-Muscat-Riyadh link of Kerala Politicians -More Kovalam Stories - Investigate state financial Institutions' Connection with Ashoka Hotel Deal
Converting Public Institutions into Private Properties...Story of Galfar Way of Stealing Indian School Al Ghubra -Covert Campaign by School lobby to oust Indian Diplomat intensifies -Patron may revoke the Memorandum of Understanding between Indian Embassy, Indian School Al Ghubra How a new Chief Executive Officer Post was Introduced in KSIDC Casino plans Kollengode palace makeover - `Tourism, Kerala heading on a path back to the future'
CAG findings on disinvestment resonate in Parliament
NEW DELHI, MAY 9 (PTI)The CAG findings on the sale of Centaur Hotels in Mumbai today created an uproar in Parliament as Left parties demanded an "appropriate" inquiry alleging there was "lurking suspicion" that irregularities had been committed by the previous NDA Goverment in their disinvestment.The issue figured in both Houses of Parliament with an agitated CPI leader Gurudas Dasgupta in the Lok Sabha demanding that the probe should "nail those who squandered millions of rupees" while carrying out the sell off of Centaur Hotels at Juhu and Mumbai airport."Criminals must be put in their proper place," Dasgupta said. The issue was raised in the Rajya Sabha by CPI-M members, led by Dipankar Mukherjee and Nilotpal Basu, who said Finance Minister P Chidambaram had promised on the floor of the House in August last year that he would give a detailed statement once CAG gave its findings."Now that the findings are out, Government should take the House into confidence on what action it was taking on the issue as CAG has passed strictures on the manner in which the disinvestment was carried out by the previous NDA Government," they said.
