Govt directors decline to pass Wild Flower Hall accounts, unhappy with financial management.
The dispute between the Oberoi group and the Himachal Pradesh government over Hotel Wild Flower Hall, one of the most luxurious properties managed by the hotel chain, has escalated.
The latest bone of contention is the financial management of the property. Top state government officials told Business Standard that three government directors, including the state Chief Secretary, declined to pass this year's accounts at the annual board meeting held here recently.
The accounts allegedly show Rs 80 crore as accumulated losses against a capital expenditure of Rs 46 crore, state government officials said.
Once the property of Lord Kitchener, the chief of the British army during the British rule, the hotel was controlled by the Himachal Pradesh Tourism Corporation (HPTDC) till it was gutted in the early 1990s.
The property, which was handed over to the Oberois under a joint venture agreement in 1993, has been making losses consistently. The state government subsequently reduced its stake in the venture from 35 per cent to 21 per cent.
Soon after the new hotel building came into operation in 2002, differences surfaced over the cost of the project. The BJP government had even tried to take over the property and the matter went to court.
Meanwhile, arbitrators decided that the two parties enter into a fresh lease agreement for the next 40 years. While the state government, which was made the owner of the property, paid Rs 95 crore, the Oberoi group paid Rs 12 crore against the state transferring its equity in Mashobra Resorts, which operates Wild Flower Hall. The arbitration award was challenged by the Oberoi group.
The Oberoi group did not want to comment on the matter on the grounds that it is sub judice.
The majestic Hotel Wild Flower Hall building is located in the midst of a thick pine forest at an altitude of 8,200 feet, 15 km from Shimla.
The luxurious property offers a spectacular view of the snow- covered Himalayan range and is popular with high-end tourists visiting Himachal.
