BackBaijal-led panel ‘misguided’ cabinet on Laxmi Vilas Palace sale: CBI
CBI says valuation of the hotel was not done properly and there was apparent malafide in the implementation process
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New Delhi: The Central Bureau of Investigation (CBI) said on Friday that an inter-ministerial panel had misguided the cabinet committee on divestment on the 2001-02 sale of Laxmi Vilas Palace hotel in Udaipur, Rajasthan, which the agency has alleged was highly under-valued.
The inter-ministerial panel, which recommended selling the hotel owned by Indian Tourism Development Corporation (ITDC) was headed by the then divestment secretary Pradip Baijal. In the Atal Behari Vajpayee-led National Democratic Alliance government that was in office then, the disinvestment ministry was headed by Arun Shourie.
“CBI is not looking at the decision of the disinvestment as a policy. While implementing the disinvestment decision of the government, the valuation was not done properly and there was apparent malafide in the implementation process," a CBI spokesperson said.
CBI’s latest stand on the matter effectively means that Shourie is unlikely to be investigated by the agency in the case.
“How can a committee misguide another committee? There were no individuals in this. I am completely fed up of this and do not want to talk about this," Baijal said over the phone.
On 29 August, the agency had registered a case against Baijal and several others. The hotel was sold “at much below the prescribed rates, resulting into huge monetary loss" to the government, the CBI said.
In its first information report, the CBI said that in 2001-02, the heritage hotel, “was first drastically undervalued and then sold/disinvested to" Bharat Hotel Ltd for approximately ₹ 7.52 crore. The CBI has said that while the government’s own valuation of the hotel was ₹ 151 crore, the market value of the property during that period was ₹ 280 crore.
“It is the business potential that has to be assessed. Asset valuation is not the perfect method for valuing business. We found that there is no arbitrariness in the fixation of the reserve price," Shourie said over the phone on Friday.
He said that he had not been approached by CBI in the Laxmi Vilas case. “They came to meet me regarding the Hindustan Zinc case last year, but not the Laxmi Vilas case."
He said that the agency had also not approached Baijal or the then joint secretary or the under secretary concerned.
Apart from Baijal, the CBI has also named Ashish Guha, then managing director of Lazard India Ltd, Kantilal Karamsey Vikamsey, proprietor of Kanti Karamsey and Co., a representative of Bharat Hotel Ltd and “unknown government officers and other private persons".
While Lazard India was a New Delhi-based financial adviser to the disinvestment ministry, Kanti Karamsey is a Mumbai-based valuer. On 29 August, CBI had said that the valuer was “not government approved".
The CBI spokesperson said on Friday that Kanti Karamsey, the valuer of the property, was appointed by the panel headed by Baijal and not by ITDC. “The valuer appointed by ITDC was changed," the spokesperson said.
“We were appointed by the department of disinvestment," Kantilal Karamsey Vikamsey, proprietor of Kanti Karamsey, said, adding that he was unaware if the ITDC had appointed anyone else before. He further said that CBI has called them to a meeting on 9 September.
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