Congress President Rahul Gandhi, taking a swipe at Prime Minister Narendra Modi alleged that – common man’s money was being used to rescue debt-ridden Infrastructure Leasing & Finance Services (IL&FS) group, a private infrastructure development firm. He asked whether the prime minister “loves financial scams”.
In his tweet titled “Lights, Camera, Scam”, he alleged that when PM Modi was the Chief Minister of Gujarat, the IL&FS was given the “Gift City” project worth Rs. 70,000 crore and no work has been done under the plan till date.
He added that in 2018 Prime Minister Modi made LIC-SBI invest ₹91,000 crore in debt-ridden IL&FS in form of a bailout.
He further wrote, “Modi ji, you are trying to save your favourite firm IL&FS which is sinking, with LIC’s money. LIC is a symbol of the country’s combined trust. People buy LIC policies saving every penny they have. Why do you want to save IL&FS using this money? Does IL&FS for you mean ‘I love Financial Scams’?”
— Business Standard (@bsindia) September 30, 2018
The company has a consolidated debt of over ₹91,000 crore and has been defaulting on debt repayment obligations since August last week.
The LIC is the single largest equity holder in IL&FS with 25.34% stake, while the SBI holds 6.42%.
Also, Congress spokesman Manish Tewari compared IL&FS to the Lehman Brother which triggered the global economic recession. He called for a special audit to expose the mismanagement in the firm.
He said, “This is why IL&FS financials need to be forensically audited as management, principal shareholders and the NDA-BJP government are unwilling to address the ₹42,000 crore question. ₹42,000 crore was disbursed in past four years. Nobody knows where the money disappeared.”
On Saturday, the group said that it would sell its assets to repay creditors. The company in its Annual General Meeting sought shareholders’ permission to carry out its plans to recapitalise itself.
The Reserve Bank of India is taking steps to improve the cash situation following the fears of liquidity crisis in the financial market due to the debt defaults by IL&FS. Further, the government has assured that appropriate actions will be taken such that there is no undue impact on the financial system.