Govt intervention sought by Congress leaders in IL&FS: FM

NEW DELHI:  Arun Jaitley released a letter from senior Congress leader K V Thomas, previous chairperson of Parliament’s Public Accounts Committee, urging the government to support IL&FS through measures that added guiding institutional investors like LIC, SBI and HDFC, who could give equity and debt of Rs 8,000 crore.

Congress chief Rahul Gandhi asserted that there was a “scam” in what he called was a bailout of IL&FS that ran counter to the section of Congress leaders, who had advised the Centre to enable investments in the disturbed company and prevent it from sinking, Finance Minister Arun Jaitley said on Monday.

He questioned whether past investments by public sector entities in IL&FS amounted to a scam, with LIC having bought 19 lakh shares as recently as 2010.

“From where has Rahul Gandhi invented a proposal of Rs 91,000 crore investment likely to take place by LIC and SBI? In fact, it is a section of the senior Congress leadership that has been urging me to enable investments and save the company,” the minister said. Thomas, in his letter dated September 20, said the National Highways Authority of India and other agencies should be questioned to hurry up the release of funds to the company, at least partially.

Thomas proposed that funding for new projects could  provide  without bank guarantees so that trust of banks could be restored. “I hope you may initiate discussion with relevant ministries... to make sure that the Indian economy does not plunge into a recession and protect small and large investors,” Thomas wrote.