Modi government protecting GSPC from being declared bankrupt: Jairam

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New Delhi, Aug 27 (IANS) Citing an RBI notification, Congress leader Jairam Ramesh on Monday demanded that the SBI should declare Gujarat State Petroleum Corp (GSPC) bankrupt and said the company owed Rs 12,000 crore to several banks.

He accused the Modi government of trying to protect the company from being declared bankrupt.

Ramesh said that on February 12, the Reserve Bank of India issued a circular stating that any company that owed more than Rs 2,000 crore to banks should be declared bankrupt within 180 days.

“GSPC’s highest debt is from SBI, which is Rs 1,200 crore. According to RBI’s notification, SBI should declare GSPC bankrupt,” said Ramesh.

“Last month GSPC submitted a 15-page document, entitled ‘Gujarat State Petroleum Corp Debt Resolution Plan’ to SBI for the restructuring of outstanding loan. Therefore, it is beyond any doubt that GSPC is not in a position to repay the loan,” he added.

Ramesh said: “GSPC has also suggested to transfer a portion of this outstanding loan to the Gujarat State Financial Services (GSFS) and Gujarat State Investment Ltd (GSIL).”

During Prime Minister Narendra Modi’s term as Gujarat Chief Minister, the GSPC was cited as one of the greatest examples of the Gujarat Model.

“In 70 years, for the first time the Central government has filed an affidavit challenging a circular of the RBI in High Court with the only intention of saving GSPC,” said Ramesh.

“In its affidavit, the government said they are not in agreement with the RBI circular and the period of 180 days needed to be extended to 360 days. Some power companies have moved the court, which includes Adani Power. So, this is another big scam after Rafale Deal,” he added.

He said SBI was under pressure to take a decision on the loan restructuring to avoid GSPC being declared bankrupt, because in case it was declared bankrupt, it would be a huge blow to the Prime Minister.

Even after the sanction of Rs 20,000 crore to GSPC, no oil or gas was extracted, he said.

Ramesh said this raised questions about the priorities and intentions of Modi. “The PM has not spoken a word on the GSPC issue after 2007. Why is he silent?”



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