CM family-owned hotel illegal, says Bangarappa

Bangarappa also alleged that “black money” had been invested into the hotel project, and demanded that the building, which had violation of over 90 per cent be demolished immediately.

Addressing the media in Bangalore, Bangarappa said that while the firm claimed to have invested Rs 12 crore into the hotel construction, the actual investment was Rs 39 crore. The hotel has been let out to Royal Orchids, Bangalore.

Akarsha Properties is a partnership firm, registered in Bangalore on June 6, 2006 with B M Jayashankar of Adarsh Developers and Dhavalagiri Property Developer Pvt Ltd, (the company promoted by son of Yeddyurappa) as partners. Yeddyurappa was deputy chief minister in 2006.

Akarsha Properties purchased 28,280 sq ft land in Shimoga for Rs 3.50 crore in 2006, and according to Bangarappa, the property was registered below guidance value, resulting in an income tax evasion of Rs 1.50 crore.

The company had obtained permission from the municipal corporation for construction of 59,348 sq ft consisting ground floor, mezzanine plus three floors on June 26, 2010.

The company however constructed 1,12,453 sq ft, consisting ground floor, mezzanine plus four floors -- resulting in an illegal construction of 53,105 sq ft, over the building plan sanctioned, and one extra floor for which no approval was sought. “How can a building of 1,12,453 sq ft be completed in a period of four months?” questioned Bangarappa.

The total cost of the construction as disclosed from all sources including bank loan is approximately Rs 12 crore, but Bangarappa said the building was valued at Rs 39 crore.
 “It is not possible to construct a building with ultra modern facilities and Italian tile flooring on less than 3,500 sq ft. The balance amount of Rs 27 crore which is undisclosed is nothing but black money,” he added.

He also said that Royal Orchids, which had been contracted by the government to run a five-star hotel in a property held by Cauvery Neeravari Nigam Ltd, under the chairmanship of Yeddyurappa,”has not paid electricity bills of Rs 1.5 crore for the past three years”.