Centaur deals to be probed

The government today said it would order an inquiry into the sale of Centaur hotels in Mumbai following the Comptroller and Auditor General's criticism of the disinvestment process adopted during the previous government's tenure.

"After examining the report of the CAG in respect of sale of the two hotels (Juhu Centaur and Airport Centaur), the government has decided to order an inquiry. The nature and scope is under consideration and will be announced in due course," Finance Minister P Chidambaram told Parliament.

Chidambaram had told Parliament last week that the government will decide on instituting an enquiry after the CAG submitted its report. The announcement follows pressure from the Left parties and Congress President Sonia Gandhi During the week.

Shourie had repeatedly sought an enquiry into the affairs.

Reacting to Chidambaram's statement, former finance minister and Bharatiya Janata Party leader Yashwant Sinha said the government's decision was 'shocking and nothing short of witch-hunting'.

The CAG report, which was tabled in parliament last Friday, had had criticised the disinvestment ministry, headed by Arun Shourie during the NDA regime, for going ahead with the sale despite having just one bidder each for both the properties.

It had also said that the government had gone ahead with the sale despite the fact that the valuation process was different on certain counts from that adopted during the disinvestment of companies like Balco and IBP Ltd.

The CAG had also said that there was insufficient scrutiny of Ajit Kerkar-promoted Tulip Star Hotels Ltd, the bidder for the Juhu Centaur. Tulip had also received repeated extensions in paying the bid amount of Rs 153 crore, for which no interest was charged or bank guarantees were encashed.

The CAG also pointed out that the disinvestment ministry intervened with a consortium of eight banks to help in closing the deal.