The bankruptcy of the infrastructure lending giant IL&FS is a result of poor corporate governance by the BJP Govt: Sanjay Nirupam
By Asmita Jadhav,
Mumbai: Mumbai Congress President Sanjay Nirupam today claimed that PM Modi and Finance Minister Arun Jaitley have been pressurizing the state-owned LIC and SBI to bail out the debt ridden Infrastructure Leasing & Financial Services (IL&FS) with the money which belongs to the common people of the country. He has also demanded a high level probe into this matter in order to investigate the role of multiple BJP Ministers who have been taking advantage of their positions and exploiting IL&FS for their vested interests.
Sanjay Nirupam said, “Being a 30-year old infrastructure lending giant, IL&FS has gone completely bankrupt today. How did the debt of this company jump by 44% and its profitability decline by 900% only in the past 3 years? The entire stock market has shaken in the past 2 weeks over this issue. Despite all, PM Modi and Finance Minister Arun Jaitley have been pressurizing LIC & SBI to pay more money and bail out IL&FS. Largest Public sector financial institution LIC owns maximum stakes i.e. 26.34% stakes in IL&FC. It also has almost 29 Crore policy holders and majority of them are common people. The Govt wants the LIC, along with the largest public sector bank SBI, to spend this money which belongs to the common people only to protect the foreign investors. If the Modi Govt doesn’t stop its trend of using the money belonging to the people only to protect its favourites, we will soon witness a situation like that of the Lehman Brother’s Collapse in the year 2008”.
Mr. Nirupam also raised questions as to why no one is questioning the fact that many board members of IL&FS have resigned from their posts. “The RBI had raised a red flag and pre-emoted this crisis a few years ago. Why did the Financial Ministry refrain from taking any precautionary measures? What is the Govt doing to ensure that none of the members who have resigned become another Nirav Modi or Mehul Choksi”, asked Nirupam.
The Mumbai Congress President demanded a high-level probe in this entire issue requesting an investigation to be conducted on the role played by multiple ministers of the BJP Govt in exploiting IL&FS before it went completely bankrupt.
Infrastructure Leasing & Financial Services (IL&FS) has about $500 Million in repayment. However, the firm has only $27 Million available. It has put its corporate headquarters worth Rs. 1300 Crore on sale, it has also identified almost 25 projects for sale. The firm also plans to sell their assets and bring down the debt by almost 30,000 Crore which comprises of only one-third of the total amount. However, this process will take almost a year while the firm has $500 Million in repayment which are due in the second half of this financial year. As of March 2018, LIC owns 25.34% stakes in IL&FS making them the company’s largest stakeholders. It is followed by Japan’s Orix Corporation which has 23.54% stakes in the company. Abu Dhabi Investment Authority, HDFC, Central Bank Of India & SBI hold 12.56% , 9.02%, 7.67% and 6.42% respectively.
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