Jet Airways crisis: Public money being used to bail out private airline, claims Congress
Congress spokesperson Randeep Singh Surjewala alleged that the government had asked state-run banks to convert the airline’s loans into equity.
The Congress on Wednesday alleged that the government was using taxpayers’ money to bail out struggling private carrier Jet Airways, The Hindu reported. The party alleged that the government was trying to make state-run banks convert the airline’s loans into equity, according to The Economic Times.
Congress spokesperson Randeep Singh Surjewala said the Prime Minister’s Office had ordered an investigation by the Ministry of Civil Aviation into the airline. Surjewala asked if was appropriate for the prime minister, the government and the finance ministry to convert Rs 8,500 crores of debt into equity under such circumstances.
Jet Airways has posted losses of over Rs 1,000 crore for three consecutive quarters since March 2018. The carrier defaulted on loan repayments to banks on December 31.
“Why should public money worth Rs 8,500 crores be converted into equity of a company that is saying that it has current accumulated loss of Rs 7,355 crores, debt of Rs 8,500 crores and is losing Rs 67 per share and why should we bail out foreign companies?” Surjewala said at a press conference.
Surjewala said Jet Airways chairperson Naresh Goyal is a London-based Non-Resident Indian who owns 51% stake while Abu Dhabi-based Etihad Airways owns 24% stake.
The Congress leader said news reports suggested that Prime Minister’s Office had asked the State Bank of India and public sector banks to waive the airline’s loan by converting it into equity of Rs 1. “Also, it is going to pay Rs 150 for every share to Etihad,” Surjewala said. “Will the Modi government now save every defaulting crony capitalist out of public funds?
Earlier on Wednesday, SBI Chairman Rajnish Kumar said the lenders of Jet Airways will make every effort to keep the airline flying. SBI is the private airline’s biggest lender, and is leading the efforts to evolve a comprehensive plan to revive the airline.
Surjewala alleged that the government was using the National Infrastructure Investment Fund to offer a package to Etihad Airways to exit its investment in Jet Airways. The Congress said the Modi government was trying to privatise the national carrier Air India, but was buying a bankrupt airline with public money. It asked why the government was not willing to give a bailout package to debt-ridden farmers instead.