A Mumbai-based company that had Union minister Piyush Goyal as one of its directors till July 2010 defaulted on loans worth Rs 650 crore secured from government banks, but still advanced an unsecured loan to a firm run by the minister’s wife Seema Goyal, a report in The Wire claimed on Tuesday.

The promoters of Shirdi Industries, which manufactures laminates, reportedly gave the Rs 1.59-crore loan to its parent company Asis Industries. Asis Industries in turn lent the money to Intercon Advisers Private Limited, which Seema Goyal heads, the website claimed.

“Piyush is a very close friend of mine since 1994,” Rakesh Agarwal, the promoter of Shirdi Industries and Asis India, told The Wire. “My relationship with Piyush is of a very loving nature and a very respectful nature but I have never used that relationship or taken benefits from it. We do not come from that sort of culture.”

Agarwal denied that his company did anything wrong by advancing the loan to Intercon while Shirdi Industries was defaulting on money owed to government banks. “This amount [unsecured loan] was given a few years ago,” he told The Wire. “At that time we had money and I was requested if I can spare money and given our friendship I did.”

At the same time that the loan was given, Shirdi had a Rs 4-crore provident fund default, the article said. The company was referred to the National Company Law Tribunal, where the banks to which it had had lent money agreed to write off 60% of its debts. In December 2017, the tribunal allowed the promoters of Shirdi Industries to bid for the company after 99% of its lenders backed them. The tribunal’s decision, however, was seemingly in violation of the Narendra Modi government’s November 2017 ordinance that barred promoters from bidding for their own company if their loans had been classified as non-performing assets for more than a year.

The company reportedly started delaying on payments during the time Piyush Goyal was on its board from 2008 to 2010, The Wire claimed. It started to default on loan payments from 2014. In 2010, global analytical company Crisil noted that Shirdi Industries’ corporate governance practises were poor and that it was struggling to pay back its loans. This report was published after the company filed for an initial public offering with the Securities and Exchange Board of India.

The Wire said that Piyush Goyal did not respond to questions sent to him.

Other defaulters

The Asis group’s other subsidiaries have also defaulted on loans to government banks. The Rs 60-crore loan that Asis Logistics secured from Dena Bank, State Bank of India and Jammu and Kashmir Bank have been declared non-performing assets, the article said. “Unlike other defaulters, we are still here and fighting from the front,”Agarwal said. “We have not closed operations in any of the firms.”

Two other of its companies – ASIS Plywood and Asis Global – have also defaulted on loans. “But the loan amounts there are small,” Agarwal added.