M A I N   N E W S

Probe ordered into Centaur hotels deal
Tribune News Service

New Delhi, May 13
The government today went on the offensive and announced a separate probe into the contentious disinvestment of Juhu Centaur and Airport Centaur Hotels in Mumbai by the previous NDA government.

The government decision is based on the findings of the CAG report tabled in Parliament last week.

The nature of the probe has been left ambiguous. It is not yet known whether the matter will be referred to the CBI, the CVC, the Public Accounts Committee (PAC) or investigated under the Commission of Inquiry Act by setting up a fresh panel.

“After examining the report of the CAG in respect of sale of two hotels, the government has decided to order an inquiry. The nature and scope is under consideration and will be announced in due course”, Finance Minister P. Chidambaram told the Lok Sabha today.

The BJP today strongly condemned the government move saying: “We are disgusted with the attitude of the UPA government and the obnoxious manner and the sense of vindictiveness in ordering such a probe.”

“On the one hand they reject the report of the duly constituted commission (Phukan Commission), on the other, under pressure, they order probe into the Centaur hotels deal. Even when the CAG has not clearly pointed out any misappropriation or fraud,” BJP spokesperson and former Finance Minister Yashwant Sinha said.

He said the decision to disinvest the two hotels was not taken solely by the then Disinvestment Minister Arun Shourie but was a collective decision of the then Union Cabinet.

The Left parties have been demanding a CBI probe into the deals. Significantly, the PAC is headed by deputy leader of the Opposition in the Lok Sabha and senior BJP leader Vijay Kumar Malhotra.

The CAG in its report presented in Parliament said the sale of two Centaur hotels took place without the benefit of competition and that valuation and reserve prices in these transactions were not consistent with the practice followed by Disinvestment Ministry in other cases.

The report said the sale of transactions of the Juhu Centaur and Airport Centaur hotels were finalised on the basis of single bids without the benefit of competition.

The CAG, in a severe criticism of the procedure and valuation process, said: “Repeated extensions and relaxation were allowed to the bidder of Juhu Centaur to facilitate the sale.”

“Various relaxations allowed to the bidder and interventions by the ministry to facilitate the sale indicated inadequate efforts to mitigate the risk of transaction in a limited competition scenario,” the report said.

The CAG said expressions of interest were received in October, 2000 from 20 parties for Juhu Centaur and 21 parties for Airport Centaur.

Arun Shourie, under whose tenure the transactions had taken place, had maintained that he was ready to face any inquiry in the sale of the hotels.

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