New Delhi: The Himachal Pradesh high court on Saturday evening issued a stay order on the state government’s takeover of the Oberoi Hotels-run resort, Wildflower Hall, in Shimla, which was seized earlier in the day by the tourism department there. , the company said in a BSE filing.
The Himachal Pradesh high court also ordered the state to refrain from interfering in the day-to-day management and ownership of the hotel until further orders.
The state tourism department, in a media statement, earlier on Saturday said it was involved in an ongoing tussle with EIH of Oberoi Hotels, and that the Himachal Pradesh government was acting on the high court’s order to claim possession of the property. .
The move comes days after the demise of the company’s dean and chairman PRS Oberoi. The company took a stay order restraining any interference in the affairs of EIH’s subsidiary, Mashobra Resort Limited, a joint venture it has with the government. The legal dispute dates back 20 years.
The court decided that the state must first decide whether it wants to take possession of the property or not. The state has until December 15 to decide.
Himachal Pradesh Industries Minister Harsh Wardhan Chauhan told the media that the hotel has unpaid dues. ₹120 crores. He said that although the tourism department and its employees took over the hotel’s accounts on Saturday, its operations will continue as normal.
EIH, which manages Oberoi Hotels and Resorts, in its FY23 annual report said about 79% of Mashobra Resort’s shares were held by the listed entity.
In a filing with the BSE, EIH said the court ordered the state government to refrain from involvement in the day-to-day management and ownership of the hotel until an official execution order is sanctioned by the court.
The hotel is located in Chhabra on the outskirts of Shimla and has rates starting at Rs ₹33,000 per night. The joint venture reported a profit after tax of ₹28.46 crore in FY22 vs ₹12.77 crore a year ago, according to the latest report.
According to EIH, in a recent report in FY23, the land on which Mashobra Resort Limited is built was originally classified as freehold and the Himachal Pradesh government terminated the agreement with MRL and sought to take possession of the land in 2005.
According to earlier media reports, the government terminated its contract with Mashobra Resort following the orders of an arbitrator. The order said that although this would continue to be land owned by the state tourism department, it would have a new 40-year lease for a sum of ₹95 crore agreed upon in 2005. Then, the company also paid ₹12 crores to the government for the transfer of the equity shares of the state.
Mint sent queries to Oberoi Hotels spokespersons and await response. The story will be updated if a response is received.
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Updated: 19 Nov 2023, 12:54 pm IST
(tagsTo Translate)Oberoi Hotels