The CBI on Thursday registered a Regular Case against former Disinvestment Secretary Pradeep Baijal and other private persons for alleged irregularities in the disinvestment of ITDC-owned Udaipur-based heritage category laxmi Vilas Palace hotel at an undervalued price causing monetary loss to the Union Government.
Besides Baijal, the CBI has named then Managing Director Ashish Guha of Delhi-based lazard India ltd and Kantilal Karamsey Vikamsey, Proprietor of Mumbai-based Kanti Karamsey & Co. While lazard was a Financial Advisor at the Ministry of Disinvestment, Karamsey was an Evaluator appointed by the ITDC. An authorised agent of Delhi-based Bharat Hotels ltd, unknown Government and private persons have also been named in the case, CBI sources said.
The accused persons have been booked for offences relating to criminal conspiracy and cheating and offences under the Prevention of Corruption Act.
“It was alleged that during the period 2001-02, M/s laxmi Vilas Palace Hotel, Udaipur, a Heritage Hotel & one of the units of Indian Tourism Development Corporation (ITDC), Department of Tourism, Govt of India, New Delhi spread in 29 Acres of prime location land with 54 rooms with all accessories was first drastically undervalued and then sold/disinvested to a Private Hotel situated at Barakhamba Road, New Delhi at a price of Rs 7.52 crore (approx),” a CBI spokesperson said.
“However, as per then DlC (District level Committee) rates of land in which the said hotel situated was allegedly Rs 151 crore (approx) and in this way, an alleged loss of Rs 143.48 crore (approx) was caused to the ITDC, Department of Tourism, Govt of India, New Delhi,” the spokesperson added.
After registration of the case, the agency also conducted searches at four places in New Delhi and Mumbai and recovered incriminating documents.
The agency sources said the market rate of the property at that time was estimated to be Rs 280 crore. The hotel is located in one of the best locations in Udaipur.
Apart from undervaluation by the Mumbai-based company that was not an approved valuer, the ITDC also downgraded it by citing decreased occupancy in 2001-02 when the 9/11 terror attacks had happened in the US.
While Karamsey had valued the property at Rs 45 per square foot, the then prevailing market rate was between Rs 1,000 and Rs 2,000.
In 2002, the Cabinet Committee on Disinvestment had approved the disinvestment of this hotel and ITDC owned other two hotels namely Qutab Hotel and lodhi Hotel in New Delhi. The reserve price fixed by the Cabinet Committee for the laxmi Vilas Hotel was Rs 6.12 crore and same was sold for Rs 7.52 crore.
The Preliminary Enquiry (PE) was registered in 2013 during UPA rule and there were protests by Opposition BJP that this was a move to target former Disinvestment Minister Arun Shourie. Shourie was examined by the CBI as part of the PE.