CBI probes hotel divestment in Arun Shourie era

NEW DELHI: The Central Bureau of Investigation has initiated a preliminary enquiry into the disinvestment of a prime hotel in Udaipur to a top private hotels group during the tenure of BJP leader Arun Shourie, inviting sharp criticism from the former disinvestment minister.
The agency has alleged that the five-star ITDC hotel – Laxmi Vilas Palace — was sold to prominent hotelier Bharat Hotels at an undervalued price during the NDA regime in 2002.
Shourie, however, slammed the CBI enquiry, saying, "Everybody including CBI has become government in the country with the evaporation of the government (UPA) and weakness of Manmohan Singh. If enquiries are registered against bureaucrats and ministers after 10-12 years of their retirement, why would they work?"
Shourie, disinvestment minister in the NDA regime, also backed former SEBI chairman C B Bhave and former coal secretary P C Parakh, calling them "honest bureaucrats". The agency has been slammed for its investigations against the two.
In its enquiry, CBI sources said, Bharat Hotels, valuers Kanti Karamsey & Co and advisors to government Lazard India besides unknown persons have been named while Shourie has not been named. Agency officials, however, said Shourie may be probed in the matter since he was the disinvestment minister during the period. Kantilal K Vikamsey of Kanti Karamsey & Co said, "We have given our statement to CBI officers in Jodhpur."
Bharat Hotels could not be reached for comment.
The agency has alleged that the ITDC hotel (Laxmi Vilas) was allegedly sold at an undervalued price in favour of Bharat Hotels which took over the 54-room five-star property for Rs 7.52 crore in 2002 against a reserve price of Rs 6.12 crore.
The Cabinet Committee on Disinvestment in its meeting held on February 5, 2002 had approved disinvestment of three ITDC properties including Qutab Hotel and Lodhi Hotel in New Delhi and Laxmi Vilas Palace Hotel in Udaipur. Sources said CBI has written to the government, ITDC and tourism ministry seeking records related to disinvestment process for examination.
Shourie said he did not remember the details of the case as it was 12 years since the transaction took place. But he maintained that all norms were followed while disinvesting the properties. "The principles of valuation are settled by the Supreme Court. Every single step was taken with the approval of cabinet committee on disinvestment," Shourie told TOI, adding that "CBI is doing whatever it wants".