Centre trying to prevent Gujarat state petroleum firm from being declared bankrupt, alleges Congress
Senior Congress leader Jairam Ramesh asked why insolvency proceedings had not started against Gujarat State Petroleum Corporation despite its huge debt.
The Congress on Monday alleged that the Narendra Modi government was trying to prevent the Gujarat State Petroleum Corporation from being declared bankrupt even though the public-sector company owes banks Rs 12,000 crore.
Senior leader Jairam Ramesh claimed at a press conference in New Delhi that a Rs 20,000-crore scam has come to light in the oil company, 13 years after then Chief Minister Narendra Modi announced the discovery of a natural gas block in the Krishna-Godavari basin.
He cited two reports of the Comptroller and Auditor General that noted that the company had taken Rs 20,000-core loan from 15 banks and had handed over drilling contracts to “four-five companies”. However, gas was not found and at present the company needs to be referred to the Insolvency and Bankruptcy Code, 2016, Ramesh added.
“Last year in August, under Prime Minister Narendra Modi’s pressure, ONGC was forced to buy the GSPC gas block and the GSPC got a relief of about Rs 8,000 crore,” the Congress leader alleged. “It still has to pay Rs 12,000 crore to banks.”
Ramesh said that according to the Reserve Bank of India a company that owes banks more than Rs 2,000 crore as of March 1, 2018, should be declared bankrupt after 180 days. Even though the 180-day period ended on Monday, the State Bank of India, the “prime mover” in the case, has not initiated insolvency proceedings against the company. “Does State Bank of India have the courage to declare GSPC bankrupt?” the Congress leader asked.
Moreover, Ramesh pointed out, for the first time in the country’s history the Centre has filed an affidavit against a circular of the central bank. The affidavit has been filed in the Allahabad High Court.
“They have destroyed institutions, they destroyed the RBI after demonetisation and with this circular, this is the ‘antim sanskar [last rites] of the Reserve Bank of India,” the Congress leader said, referring to the Centre. “If this circular is not implemented, then I am afraid the RBI has lost whatever little autonomy, whatever little credibility , it had.”