Hotel Hyatt is blamed for breaching the contract conditions signed with the govt
KATHMANDU, April 20: The government has sought clarification from Hotel Hyatt Regency management, which is alleged to have breached the agreement with the government while taking land on lease.
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Officials at the Ministry of Culture, Tourism and Civil Aviation said it has sent letters to the Hotel Hyatt Regency and Taragaon Development Committee on Tuesday. The ministry has asked the hotel authority on why not to scrap the land lease contract and switch the uses to an alternative purpose.
The government had signed an agreement with ICTC of Saraf Group allowing the group to invest Rs 1.50 billion. The group through its influence has grown its shares to almost double of the contracted amount.
As a result, the government that had a 39 percent stake (or total of 4.275 million shares) in 1992 has now declined to only about nine percent. Private partners Radeshyam Saraf and his family, who are Indian, and local entrepreneur Ram Lal Shrestha and family, as well as the companies in which they have stakes, now own most shares in the loss-making company.
The hotel management has been blamed for not maintaining proper records of financial transactions worth Rs 381.20 million, which were paid to the board members and management. In the past three decades, the hotel has paid a dividend of only Rs 72.30 million to the government.
The government has also asked the authority concerned to send details of the foreign investors who were reported to have added investment of Rs 950.8 million in the hotel.
