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Rediff.com  » Business » No breach of rules in Centaur sale: Shourie

No breach of rules in Centaur sale: Shourie

April 30, 2003 16:52 IST

Batra Hospitality Private Ltd broke no ground rules while disposing off its shareholding in Centaur Hotel Mumbai to Sahara Group, Lok Sabha was informed on Wednesday.

Divestment Minister Arun Shourie told the Lower House during question hour that the Attorney General Soli Sorabjee had advised that there is no material which establishes fraudulent conduct or any illegality in transactions.

The re-sale of hotel property had raised controversy when Shiv Sena accused the government of underselling the property.

The Batra group had bought the property from Hotel Corporation for a sum of Rs 83 crore (Rs 830 million) last April and in turn disposed it off for Rs 45 crore (Rs 450 million) in addition to repayment of debts owed to banks to tune of Rs 70 crore (Rs 700 million) later that year.

Under the agreement between Batra group and Hotel Corporation, assignment of agreement, benefits or burdens under the agreement without prior consent was prohibited without consent of later.

In his advise the AG had said that there was no need for obtaining prior consent as transfer of entire shareholding by Batra group did not amount to assignment.

"BHPL is a legal entity separate from the shareholders. Even after the transfer BHPL is obliged to perform the terms and conditions of agreement to sell. There has been no assignment by BHPL to obtain any prior consent as contemplated by Article 13.4 of agreement to sell and there has been no breach by BHPL," Sorabjee opined.

On whether the change in name affects provisions of law, he said that the same does not affect the entity or its continuity.

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