Government stops short of a probe into Centaur sale

Former Disinvestment Minister Arun Shourie raised the issue of several checks that his government had put in place before the disinvestment took place. He said that the bid by Tulip was Rs 153 crore, which was almost 50 per cent higher than the reserve price of Rs 101.60 crore. He added that because the ‘‘price offered’’ was good, the government’s view was not to let the deal out of the hand by taking it to an uncertain second round, which is why the company was given extensions.

Shourie also said that Tulip was not granted any favours and in fact the company’s bank guarantee (BG) from an obscure bank called Allied Boston Bank was rejected and the company asked to enhance its BG.

Chidambaram, replying to a Calling Attention Motion raised by Dipankar Mukherjee of CPM, said that first nobody in the NDA government raised a question on the issue of going ahead with a single bid for the hotel or questioned the ‘‘adjustment’’ of valuation by the global advisers to Rs 101.60 crore from the earlier Rs 246.04 crore and a depreciated value of Rs 214.14 crore put forth by the asset valuation company.

Chidambaram also pointed out that it was surprising that so much ‘‘indulgence was granted to the gentleman (Kerkar)’’ when twice after ordering the encashment of his bank guarantees the government did not do so and gave him several extensions even when he failed to make payments for the hotel he had bid for. Chidambaram said that he couldn’t answer all the questions raised in the House as the files relating to the deal were with the Comptroller and Auditor General (CAG).

Speaking to The Indian Express after the debate Shourie said: ‘‘The FM’s reply was fair but even he has not pointed out some details. The fact that the BG invoking had been ordered twice and every effort was made to prevent Tulip from wriggling out of commitment and government losing a good bid of Rs 153 crore.’’

During the discussion in Rajya Sabha today, questions were raised about the disinvestment procedure; the fact that Kerkar was on the Board of Air India —which owns Hotel Corporation of India and its Centaur brand of hotels — when its disinvestment was recommended; the several extensions given to Kerkar for making payments; and the fact that Tulip hotels was the only bidder for the hotel.

Participating in the discussion, Congress and Left members said though the sale of the hotel had been approved for Rs 153 crore on the floor price of Rs 101 crore, the purchaser, Tulip, had been given several extensions to complete the transaction and a consortium of public sector and private sector banks had bailed out the buyer. Surprisingly, Sanjay Nirupam of the Shiv Sena, an ally of the NDA, also joined the chorus for a probe into the Centaur deal.

Anand Sharma of the Congress said though there were 20 bidders, three had been found ineligible and 16 others withdrew. Sanjay Nirupam said Batra Hospitality — which had bought the Mumbai Airport Centaur — should be blacklisted and not allowed to take part in any government disinvestment tendering. He alleged the group, instead of being blacklisted, had been shortlisted for sale of airport Centaur in New Delhi.