KATHMANDU, Nov 24: President of Taragaon Bikash Samiti, Narad Luintel, has asked for revision of the lease agreement of 148 ropani land provided to Taragoun Regency Hotel Limited, popularly known as the Hyatt Hotel. The rent paid for the government land on the hotel premises is only Rs 3.2 million per annum, which is very cheap going by the market rates.
Speaking to lawmakers at the parliamentary International Relations Committee on Friday, Luintel said that the lease rate was very cheap and needed to be revised immediately.
“Besides this, the Joint Venture Agreement also needs urgent revision to protect the government land being converted into shares of company,” said Luintel.
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The company has distributed only 7 percent cash dividend to shareholders in its operation of 18 years. According to the Joint Venture Agreement, the 148 ropani of land will be converted into shares of the hotel at a price of Rs 1 million per ropani, which is extremely cheap going by the market rates. Government officials fear that this provision may come into implementation anytime leading to big loss to the government.
The government had sold 150 ropani out of the total 304 ropani land to the hotel as part of its share investment at the beginning. The government had stake of 39.77 percent initially, but now the stake has been dramatically lowered to 9.1 percent. Nearly 80 percent share of the five-star hotel is now owned by Shrestha and Sharaf families. About 10 percent of the remaining shares is owned by the general public.
Taragaon Bikash Samiti and the Ministry of Culture, Tourism and Civil Aviation had investigated the dubious share acquisition by the two business families. They had both found discrepancies in share transfer, according to the sources having inside knowledge of the matter.
The Samiti has claimed that the Sharaf and Shrestha families have revised article of association and rules on their own and acquired most of the shares. But no action was taken to stop them, despite repeated warnings from the Samiti.
Luintel also demanded auditing the entire financial status of the hotel by auditors appointed by the Office of the Auditor General like any other public entities.
“All the income and spending must be audited by the government auditors in the same way other entities are audited,” Luintel said. The Samiti’s president is currently a member in the board of directors of the hotel representing the government. But he has stopped sitting in the meeting stating that the hotel management was not transparent on financial matters.
The Samiti had its three members in the board of directors back in 1993, but the number has now been reduced to one due to dramatic changes in the company’s stakes. Sharaf and Shrestha families have 7 members in the 11-member board of directors.
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President Luintel also handed over documents related to the hotel to the International Relations Committee on Friday. The committee has said that it will examine the documents and discuss the matter further.
