Row in Lok Sabha over Centaur disinvestment

Deflecting the Opposition’s allegations that the government was selling profit making PSUs in the name of privatisation, Disinvestment ...

Deflecting the Opposition’s allegations that the government was selling profit making PSUs in the name of privatisation, Disinvestment Minister Arun Shourie on Tuesday told the Lok Sabha that between 1991-2000, 39 PSUs were sold of which only two were loss-making. During the same period, Shourie said, the employment to people in PSUs fell from 2.3 million to 1.7 million.

Shourie said that during the last two years since he took over, 36 PSUs were disinvested of which 26 were loss-making.

Despite Shourie’s assurances, Congress on Tuesday demanded a CBI inquiry against the sale of Centaur Airport Hotel in Mumbai by Batra Hospitality Pvt Ltd (BHPL) which has resold the property to Sahara India group for Rs 115.5 crore after buying it from the government for Rs 83 crore. Shourie defended his ministry’s decision to sell the property at Rs 83 crore based on the valuations provided to it by the ministry of civil aviation.

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Shourie assured the House that the government had not favoured Batras as the first time around their bid was rejected when they bid Rs 65 crore against a reserve price of Rs 73 crore. It was only later when they bid Rs 83 crore that the hotel was awarded to them.

Shourie said that his ministry’s procedures for disinvestment were not flawed and that even Congress-ruled states like Punjab had sought their rule book in order to follow the same, he informed.

In a written reply in the Lower House, Shourie said that ‘it has been intimated by Sahara India group that the total transaction value paid to the shareholders of BHPL amounted to Rs 45 crore in addition to repaying the borrowings from Oriental Bank of Commerce to the extent of Rs 70.50 crore’. Sahara India group has further intimated that the new management intends to operate the hotel.

Stating that contractually BHPL cannot sell the property without prior consent of HCI, the erstwhile owner of Centaur Hotel, he said legal identity of BHPL has not undergone any change. Similarly, the lease agreement between Airport Authority of India (AAI) and BHPL for the land on which the hotel is located prohibits mortgage, assignment, transfer or sub-lease of the property without the prior consent of AAI.

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‘The legal advisors to the disinvestment transaction have advised that the legal identity of BHPL has not changed with the change in its shareholding pattern and the ownership, right, title, interest and obligations of the entire business of centaur hotel continues to vest in BHPL which is managing the business and affairs of the hotel as per the agreement’, he said.

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