The Telegraph
Since 1st March, 1999
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MPs signal Centaur storm

New Delhi, Nov. 14: Members of the parliamentary committee for civil aviation today demanded scrapping of the sale of Mumbaiís Centaur Hotel and a probe into the deal that many hinted smacked of crony capitalism.

Batra Hospitality had acquired the hotel for Rs 83 crore last month, only to sell it to the Sahara group for approximately Rs 30 crore more. The Batras are known RSS sympathisers and made a killing on the deal.

Indicating what the BJP was likely to face in Parliament next week, Sanjay Nirupam of the Shiv Sena and Trinamul Congress MP Dinesh Trivedi served notice on the Centre. They demanded that the deal be rejected as re-sale of the hotel violated an agreement clause that buyers would have to hold it for a fixed period or hand it back to the government.

Nirupam pointed out that sale of 100 per cent shares of Batra Hospitality, which bought the hotel from the government, to the Sahara group was tantamount to a change in ownership, violating clause 13.4 of the sale agreement.

The demand for scrapping the sale comes just days before a crucial conclave between deputy Prime Minister L.K. Advani and ministers involved in the controversy surrounding the divestment process and a meeting of the Cabinet Committee on Disinvestment, which will decide on future policy.

Earlier, too, the government has been charged with selling the family silver at throwaway prices, especially when it sold aluminium major Balco for just Rs 550 crore. There was also a furore over allowing buyers to channel PSU money into their own companies as in the case of the Tatas drawing on VSNLís huge reserves.

But this is the first time that a sale is being openly challenged on the ground that the buyer with RSS links made a 40 per cent profit within weeks of purchasing the property.

Nirupam and Trivediís demands will strengthen the hands of the anti-divestment faction, which will take up Centaur and the other selloffs that have left the public suspicious of divestment.

Nirupamís move implies that Shiv Sena chief Bal Thackeray is supporting this lobby within the Cabinet and will probably intercede at the highest level in its favour. This will come as a shot in the arm for the anti-selloff lobby as the DMK and the Telugu Desam Party have stayed away from it and even disapproved of its actions.

Shourie and his supporters within the Cabinet have floated several compromise formulae in anticipation of a deal being worked out by the deputy Prime Minister.

These could allow strategic sales while giving PSUs greater freedom to participate in the bidding. It could give the green signal for the sale of either Bharat Petroleum Corporation Ltd or Hindustan Petroleum Corporation Ltd through the strategic route while putting the other up for divestment through the open market, where only small investors will be allowed to bid.

But Nirupam and Trivediís demands for scrapping the Centaur sale could well trigger a hue and cry in Parliament, stalling disinvestment for some time.

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