‘Centre challenged RBI circular to cover up GSPC scam’

Congress core group member Jairam Ramesh has alleged that the “scam” in Gujarat State Petroleum Corporation (GSPC) has forced the Centre to challenge a circular by the RBI in Allahabad High Court. The circular issued by the RBI, he said, wanted the banks to declare a company bankrupt if it has ₹2,000 crore outstanding against it and defaults in repayment.

The circular said such announcement should be made within a period of 180 days with effect from 1 March, 2018. This period of 180 days is over today (Monday) and, therefore, the SBI, lead bank among the lenders to GSPC, has to initiate action before to declare GSPC a bankrupt entity. The Congress, citing a CAG report, has been alleging that there is a scam of ₹20,000 crore as the GSPC failed to extract gas from KG Basin as promised by the then Gujarat Chief Minister Narendra Modi.

He said GSPC had taken a loan of ₹20,000 crore from 15 banks, the contracts were awarded to their favourite companies, money was spent but, no gas could be extracted. “In the year 2007 elections, the Chief Minister Narendra Modi used to claim that in Gujarat if you will open a tap, only oil or gas will come out of it,” Ramesh claimed.

“This is another big scam after Rafale Deal. Banks were exploited, Navaratna Company ONGC was exploited, big lies were spoken, tall claims were made and contract for drilling was awarded to one such company, which was in the business of garment manufacturing,” Ramesh said.

The Rajya Sabha member added that the SBI is under pressure to take a decision on the loan restructuring to avoid GSPC being declared bankrupt. “This is because in case GSPC, once considered a ‘Mukat Mani’ of the Gujarat Government, is declared a bankrupt company, it will be a big blot on the name of the Prime Minister,” Ramesh claimed.