Ashok Yatri Niwas in a storm of controversies

A A

Corporate Bureau: New Delhi, Aug 5 , Aug 06 2008, 00:52 IST

Ashok Yatri Niwas, once owned by India Tourism Development Corporation (ITDC) which was divested by the government in 2002, remains embroiled in controversies with a legal battle raging amongst its buyers. In an auction in May 2002, Moral Trading and Investment purchased the property for Rs 45 crore to set up a 410-room hotel, Ramada Plaza. However, the hotel which is in the heart of the national capital soon ran into dispute as the promoters of the group, RP Mittal (Moral Trading) and Hillcrest Realty (which invested in the company) filed cases against one another over ownership issues.

Hillcrest Realty, a Malaysia-based company invested Rs 28.29 crore as 97% preference shares in Hotel Queen Road Pvt Ltd, the special purpose vehicle floated by Moral Trading. However, later Hillcrest filed a case in the Delhi High Court accusing Moral Trading of not paying any dividend to it. According to Mohit Chaudhary, lawyer for Hillcrest, "According to section 87 2B of the Company Law, if a firm fails to play dividend for two years, the preference shares get converted into voting rights."

Having not started operations since 2002, Moral Trading did not pay any dividend to Hillcrest. "The time when we bought the property, the real estate scenario in the country was not good and tourism was also not very booming, because of these challenges, we could not start the hotel," said RP Mittal. On being asked whether Hillcrest should get any voting rights Mittal said, "Section 87

... contd.

Ads by Google

Single Page Format

1 | 2 | Next