The Telegraph
Since 1st March, 1999
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Shourie in deal dock
I reiterate my offer to face any inquiry that the PM or FM may deem fit - Shourie

New Delhi, May 6: Today was a bad day out of office for Atal Bihari Vajpayee and his team with the comptroller and auditor general criticising the manner of sale of two government-owned hotels and the unauthorised spending on the India Shining campaign.

In its report on the sale of two Centaur properties in Mumbai, the CAG said the hotels were undersold, sale conditions were relaxed to help the final bidder and in the case of Centaur Juhu , the disinvestment ministry intervened to help facilitate financing of the deal.

Signals coming out of the government suggested a formal probe could be ordered.

Arun Shourie, who was disinvestment minister at the time, issued a point by point rebuttal of the criticisms expressed by the CAG.

'I have already offered to face any inquiry,' he said.

Congress and Left members want a CBI probe.

The CAG report focused on the sale of the Airport Centaur to the Batras, who had links with the RSS, and of Centaur Juhu, to a company floated by Ajit Kerkar, a former Air-India director.

The decision to sell the property was taken soon after Kerkar resigned from the board to float Tulip Hospitality which bought the hotel for Rs 153 crore.

Of the 20 bidders, three were disqualified and 16 chose not to respond for unknown reasons. The report pointed out that Tulip was allowed to bid despite having a paid-up capital of only Rs 2,000.

It added that the bidder could not pay on time and had to be given three extensions. Even the initial cheque of Rs 15.3 crore issued by Tulip on December 31 could be encashed only if the government entered into an agreement to sell. As the agreement could not be signed till the full payment was made, the cheque could not be encashed.

The ministry intervened and called a government-owned bank which had refused to fund the deal till an agreement to sell was signed.

'This bank not only agreed to relax the condition imposed earlier but also become the lead banker for the deal subsequently,' the CAG said.

On the Airport Centaur bought by Batra Hospitality, the report said the global adviser revalued the property and set a minimum reserve price of Rs 78.3 crore, which was the lower end of the range of suggested prices that had an upper limit of Rs 105.7 crore.

The practice till then was to fix the median, which would have been Rs 92 crore, as the reserve price.

The Batras picked up the hotel for Rs 83 crore to resell it for about Rs 30 crore more to Sahara in a month.

About India Shining, the Vajpayee government’s ill-fated pre-election campaign, the CAG said: 'The ministry of finance did not obtain approval of Parliament before incurring an expenditure of Rs 63.23 crore.'

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