| Chidambaram, however, said the government would consider an inquiry into the issue only after receiving a final report by the Comptroller and Auditor-General (CAG) on the sale. |
| Chidambaram's is the first significant statement by the United Progressive Alliance against a minister in the previous National Democratic Alliance government on this issue. |
| Reacting to the statement, Bharatiya Janata Party President L K Advani said, "The government is taking advantage of the fact that the Opposition is boycotting Parliament to make wild allegations against the NDA government." |
| Chidambaram also said his ministry would advise the seven banks that had lent Rs 129 crore to Tulip Hospitality Services Ltd -- a company headed by Ajit Kerkar that had bought the hotel -- to take pre-emptive measures to secure their loans, which had turned non-performing since 2003. |
| The finance minister was replying to a calling attention motion moved on the issue by Communist Party of India (Marxist) leader Basudeb Acharya. |
| Chidambaram said pre-emptive action was advised since it was learnt that Tulip Hospitality Services was seeking strategic investors for the project. |
| According to the share purchase agreement signed between Hotel Corporation of India, the seller, and Tulip Hospitality Services, "neither this agreement nor any benefits or burdens under this agreement shall be assignable by either party without the prior consent of the other party". |
| The finance minister added in his statement that public sector banks were vigilant in protecting their financial interests vis a vis loans/banks guarantees provided by them. |
| Earlier, responding to a slew of questions on the matter, Chidambaram appeared to have no quarrel with the valuation of the hotel at Rs 101. 60 crore, saying valuations were arrived at after complex calculations. |
| He, however, detailed how Tulip Hospitality Services, a company with a capital base of only Rs 5.05 crore, was given relief from deadlines for loan payments. |
| "A schedule for payment was drawn up for Tulip Hospitality Services on February 6, 2002. However, Tulip Hospitality Services failed to meet the deadline for payment on February 21, after which Air-India was asked to revoke Tulip Hospitality Services' bank guarantee. On February 22, 2002, Kerkar met the then disinvestment minister and said that the banking consortium would meet the minister on February 23. After which the order was not implemented," said Chidambaram. |
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