CBI Should Probe Real Culprits in Centaur Hotel Deal
The government last week announced a CBI probe into the sale of Hotel Juhu Centaur, Mumbai and Hotel Airport Centaur Mumbai. In what looks like leaks from the CBI or the government, there appeared newspaper reports suggesting there is nothing much to enquire into and that the CBI might close the file before it opens one. “Sources in the CBI”, told a newspaper that it has not yet decided whether to open a preliminary enquiry or register a regular case.
In this context we would like to intervene and raise certain issues that could help the CBI and the government make up their minds. The reason why the finance ministry very reluctantly referred this case to the CBI is the report of the Comptroller and Auditor General of India tabled in the budget session of Parliament. The CAG’s mandate is to audit records of transaction and not investigate corruption. After examining the old government records of sale of these two hotels, the CAG concluded that the government did not obtain the “best possible price” for the two hotels.
The CAG is not supposed to look into why the “best possible price” was not obtained. It can only point out procedural lapses that have occurred during the sale of these two hotels by the NDA government. But why did these lapses occur? Why were they undersold? Who were behind the sale of these two hotels? Who were the beneficiaries? We have some answers and some questions. These pertain to the sale and resale of Hotel Airport Centaur, Mumbai. Our enquiries reveal that former disinvestment minister Arun Shourie’s role in this deal was that of the mythical Shikhandi of the Mahabharata. He still retains this role insofar as diverting all attention from the real beneficiaries of the sale and resale of Hotel Airport Centaur, Mumbai. Our attempt is to bring into the public domain the real culprits.
AL Batra bought Airport Centaur for Rs. 83 crore and resold it for Rs. 115, making a cool profit of Rs. 32 crore, all within four months. How could Batra do this? This could be done only because there was a loophole in the sale agreement between the Hotel Corporation of India (HCI) and Batra. The agreement did not conclusively bar the resale of this hotel by Batra, nor was there a lock-in-period for the resale. So, Batra was free to resell the hotel the day he got possession of it.
We want the CBI and the government to ask former Prime Minister A.B. Vajpayee’s son-in-law Ranjan Bhattacharya, whether he made a call to a senior HCI official on April 18, 2002 to seek details of the sale agreement to be finalised between Batra and the HCI. Is it true that one Sanjiv Tyagi, a business associate of Bhattacharya made the call and then handed the phone over to Bhattacharya?
There are undeniable links between Bhattacharya and Batra. Both are business associates. According to NDA government’s reply to Parliamentary Standing Committee’s (tourism) queries, Airport Hotel was sold to Batra only because of his experience in running Radisson Delhi. A company called AB Hotels owns this premier five star hotel. However, Batra did not bid for Airport hotel under the name of AB Hotels, instead he used the banner of AL Batra group of companies. Then he floated a special purpose vehicle, Batra Hospitality Pvt. Ltd.
Bhattacharya is the biggest Indian partner of the multinational hotel chain Carlson Hotels Worldwide. Bhattacharya’s companies Chanakya Hotels and Talent Marketing are partners with Carlson companies and have jointly set up two companies, Carlson Hospitality Marketing India Pvt. Ltd., and Country Development and Marketing Services Pvt. Ltd. Radisson is just one of the brands of Carlson. Bhattacharya’s CDMS runs a Radisson hotel called Fort Radisson Raichak. Bhattacharya’s Masjid Moth office has a board clearly displaying the brands he represents: Radisson and Country Inns and Suites by Carlson.
CDMS and Carlson are also involved in the International Institute of Management Technology, Gurgaon, with a branch at Radisson, Raichak. IIMT’s main promoters are Unitech group, which is the biggest stakeholder of Radisson, Delhi. In fact, several directors of AB Hotels are part of IIMT in which Bhattacharya figures in as a member of the executive management committee.
Apart from the many informal links through Unitech and others, Bhattacharya and Batra have a common director. Carlson’s India representative, that it, it’s top official in the country, is Kulbhushan Kachru. He is a director in two of Bhattacharya companies: Country Development and Management Services and Carlson Hospitality Marketing Pvt Ltd. Kachru is also director in AB Hotels, whose chairman is Batra. See annexure one to four. In fact, Bhattacharya’s man Kachru operates out of a first floor office of Radisson, Delhi owned by Batra. Did Bhattacharya too have an office in Radisson, Delhi?
Is it because Bhattacharya and Batra did not want their links to be known to the world that Batra did not bid for Airport hotel using AB Hotels’ or Radisson Delhi’s name? The moment you utter the name Radisson, the Carlson connection and its Indian partner Bhattacharya would come into the fore. Carlson’s representatives in Bhattacharya’s companies are: Country Development and Management Services: Bjorn Gullaksen, executive vice-president, Carlson Hotels Worldwide and Paul Kirwin, head of Carlson Asia Pacific. Brian Stage, another executive vice-president of Carlson Hotels Worldwide is a director in Bhattacharya’s Carlson Hospitality Marketing Pvt Ltd. And Batra gave Carlson a toehold in India by setting up Radisson, Delhi. He was allotted the land near Delhi’s international airport and he roped in Unitech to partner the venture.
Also, had Batra used AB Hotels to bid for Airport Hotel, it would have been impossible for him to so easily resell the hotel. What Batra did was to sell the company that bought Airport Hotel – Batra Hospitality to Sahara. He could achieve this only because it was a shell company. He could not have done it with AB Hotels that owns and runs Radisson, Delhi.
When the Parliamentary Standing Committee asked the NDA government for the share holding pattern of Batra Hospitality Pvt Ltd., the government sought time to collect information. Obviously, the time was used to sanitize the files of Batra Hospitality. This company’s registration number is 55-37820. Is it because there is much to hide that the Registrar of companies, Delhi does not allow examination of this file? The name of Ashok Kapur, the fifty per cent partner in the company is missing from the file. When the then disinvestment minister Mr. Arun Shourie was asked who this Ashok Kapur was, he told Parliament that he has not even heard of this name. Kapur and Batra bought Airport hotel together. Yet, the seller, Shourie did not know the buyer. The proof of Kapur’s involvement in the deal is annexure five.
Kapur and Batra are or were members of the Chhattarpur temple trust when they bought the Airport hotel. Did they use temple trust funds to raise around Rs. 25 crore to buy the hotel? Did they use the trust’s assets to raise a loan of Rs 60 crore from Oriental Bank of Commerce to fund their takeover of Airport hotel? The temple trust is fighting a case in the Delhi High Court over allegations of misuse of temple funds.
This is not the only case of government property being undersold or in some cases simply handed over to Bhattacharya’s friends. We have information about these other cases. However, we limit our present exercise to Airport hotel because a thorough investigation into this deal would inevitably lead to all other links of Bhattacharya and would bring out his common interests with beneficiaries of other hotel sales as well. Messrs. Lalit Suri and Sushil Gupta would all fall in the ambit of any investigation into Bhattacharya.
We don’t want the CBI to waste time drinking Madras coffee or Beijing tea being offered by Shourie, who has remained Bhattacharya’s shield and facilitator. The NDA government’s front man for the privatisation process, no doubt would come out with three or four full pages of journalism of courage shortly in response to our expose. But the real crooks behind the façade decided everything and made money out of it all. And Bhattacharya was no ordinary deal-broker. In all documents pertaining to his many companies, his address remained that of Vajpayee. And it changed according to the changes in Vajpayee’s political career – from Safdarjung Road to Race Course Road and now to Krishna Menon Marg.
Let the CBI investigate the shareholders of Reeshankar Investments Ltd., this company (Fifth Floor, Les Cascades Edith, Cavell Street) registered in Mauritius owns 51,60,000 shares in Radisson, Delhi. That is, whoever owns Reeshankar investments is one of the biggest stakeholders of Radisson, Delhi. Then of course there is another company registered in Mauritius which is equally interesting: DSO Investments, C/o Horwarth Corporate Finance Ltd, Third Floor, Amod Building, 19, Poudriere Street, Port Louis. We hope all this would help CBI make up its mind whether to open a file or close it; to register a preliminary enquiry or a regular case. With all this information CBI does not need more than a month to file a chargesheet in this case.
Dipankar Mukherjee, MP (The then Chairman of the Parliamentary Standing
Committee on Civil Aviation which recommended a CVC enquiry into the deal)
Prashant Bhushan (Lawyer, Supreme Court of India)
Paranjoy Guha Thakurta (Journalist)