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regular-article-logo Sunday, 16 June 2024

Is it the job of LIC to save Adani, asks Rahul Gandhi

Congress MP points out that around 98 per cent of the total investments in the Adani group by investment companies were from the LIC

Sanjay K. Jha New Delhi Published 02.03.23, 03:22 AM
Rahul Gandhi

Rahul Gandhi File picture

Rahul Gandhi on Wednesday said the amount of damage caused to retail investors and the country by forcing financial institutions like the LIC and the SBI to invest in the Adani group would be known when the complete truth of the sordid affair came out.

In a video released by the party on Wednesday morning, the Congress MP, who has sustained pressure on the Narendra Modi government despite his first remarks on the issue being expunged in Parliament, said: “On whose order have the SBI and the LIC continued to invest in the Adani group despite huge losses?”

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Rahul said: “The SBI is the country’s biggest public sector bank. Have the LIC and the SBI been ordered to save the Adani group? Why did the LIC make such a huge investment in the Adani group despite known dangers? Private fund managers who take greater risks avoided investing in the Adani group. Why is people’s money still being invested in Adani companies despite losses?”

Explaining through graphics the developments that took place after the Hindenburg report, Rahul said: “Of the Rs 2 lakh crore debt of the Adani group, Rs 70-80,000 crore is by banks; around Rs 27,000 crore by the SBI, and Rs 5,500 crore by Bank of Baroda.”

Rahul added: “The LIC has invested around Rs 36,474 crore. This is your hard-earned money. Do you want to put the future of your children in danger after earning money honestly with hard work? The question arises on who is putting your money in danger? Why is your money used to make up for Adani’s losses?”

Pointing out that around 98 per cent of the total investments in the Adani group by investment companies were from the LIC, Rahul said: “The SBI chief is protecting your money or Adani’s business? Is it not the Prime Minister’s duty to ensure the resources of financial institutions like the LIC are safe? The value of the LIC’s shares is down by Rs 50,000 crore. Will the Prime Minister reveal the truth of losses suffered by the LIC after January 24, 2023, when the Hindenburg report came out? What’s the Prime Minister doing to lessen the worries of panicked retail investors of the Adani group, which faced allegations of fraud, money laundering and investments by shell companies?”

Congress communications chief Jairam Ramesh, persisting with his daily grilling, told the Prime Minister: “This is our second set of questions relating to the Adani coal scam in which you are directly implicated. On April 9, 2015, you had stated that the ‘conclusion of the auctions in coal and spectrum establishes that the curse of scam and corruption is avoidable and transparency possible if there is political will’. It is ironic that you spoke these words only two weeks after going out of your way to reallocate huge coal mines to your favourite business partner, after writing enabling provisions into the new coal law.”

Ramesh said: “Your government passed the Coal Mines (Special Provisions) Act on March 20, 2015, to implement the Supreme Court’s decision to cancel and auction prior to coal mine allocations. However, Section 11(1) of the Act added a convenient loophole by permitting a new concessionaire to continue mining contracts signed by the previous allottee. This led to the reappointment of the Adani group by BJP state governments as mine developer and operator (MDO) for two mines, including the Parsa East and Kente Basan coal block in Chhattisgarh on March 26, 2015.”

He added: “A subsequent NITI Aayog report critiquing this allotment has reportedly been suppressed, but correspondence has now emerged in which senior officials in your own office have described these allocations as ‘inappropriate’ and lacking ‘consistency and transparency’. Clearly your own officials, perhaps fearful of being held accountable, are distancing themselves from this blatant favouritism towards the Adani group. Are their written observations not a stinging condemnation of your hypocrisy and the fact that you have clearly been tainted by the curse of scam and corruption?”

Ramesh said that even after pointing out that the fresh MDO contracts with the Adani group were opaque and inappropriate, PMO officials chose to amend the Coal Block Allocation Rules only prospectively to prevent this in the future.

“They left the problematic Adani group allocations untouched even though the group is the sole beneficiary of the Section 11(1) loophole. Did you put any pressure on your officials to ensure that no retrospective changes are made that could damage the commercial interests and cash flows of your cronies?” he asked.

Recalling that he had on February 14 asked whether Modi exerted pressure on Bangladesh Prime Minister Sheikh Hasina to accept terms that were extremely favourable to Adani Power and unfavourable to Bangladesh in the contract to supply electricity from Adani’s Godda (Jharkhand) power plant, Ramesh said: “Since then, it emerges that the Rampal power plant, set up earlier by India’s state-owned NTPC in Bagerhat, Bangladesh, has a much more balanced power purchase agreement (PPA) that furthers both Indian and Bangladeshi interests. Public pressure appears to have forced Adani Power to agree to a renegotiation of the exorbitant fuel cost of the Godda plant. This begs the question: how does acting as an agent of the Adani group and trying to enrich your friends at the expense of our neighbours help further the Indian national interest?”

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