Shimla: Himachal Pradesh government has asked Comptroller & Auditor General (CAG) to conduct special audit of Wildflower Hall hotel run by Mashobra Resorts Ltd, which is the only five star hotel in Himachal.
In a statement given to media here today Principal Accountant General (HP) Rita Mitra confirmed that the state government had made a formal request for a special audit of the company that operates Hotel Wildflower Hall. She said that state government request is still under consideration. It is worthwhile to mention here that after burning down of the old heritage building in 1990, the state government entered into a joint-agreement with EIH Ltd, an Oberoi company in the hotel industry for resurrecting Wildflower Hall hotel.
The government request letter to CAG states that the equity was worked out on a project estimated to cost Rs40 crore, but on completion it had been drastically increased to more than Rs104 crore, which resulted in dilution of the government’s shareholding. Also, in about 10 years of operation the hotel has run up losses of Rs 172.62 crore, which in the books have been shown as unsecured loans. Whereas, the company has converted an Rs100.56 Cr unsecured loan into advance against shares for EIH with the intention of converting it into share capital. The government has not given its consent, as it would further dilute its equity and has sought a special CAG audit for a detailed examination of the company’s accounts.