The state government, on Tuesday, sought to distance itself from the controversy over funding to the UB Group, which owns the beleaguered Kingfisher Airlines. The state government has a 49% stake in SICOM Ltd, a finance company that has lent Rs400 crore to the UB Group.
Hit by reports of the government's tacit bailout package, minister of state for industries Sachin Ahir clarified, “The state government has a 49% stake in SICOM and we have deputed bureaucrats on the board. That's where the government's role ends.”
Ahir stressed that there was no government or political interference in the running of the company. “SICOM does not have to get any of its decisions ratified or cleared by the state government. Its board includes experts from the industry, and not just bureaucrats. The lending to UB Group is not a government decision,'' he said.
Three of the nine directors on SICOM’s board are IAS officials, including industries secretary K Shivaji. The managing director of the company, Baldev Singh, is also a bureaucrat, and its chairman is R M Prem Kumar, former chief secretary of the state.
Yet, officials from the industries department said that other than a courtesy copy of the annual report, none of the company's decisions or documents were routed through the government.
The company provides promoter finance and is learnt to have provided loans to UB group in exchange of shares of Kingfisher Airlines. Deputy chief secretary of state Ajit Pawar pointed out, “We don't interfere in the functioning of the company. I think its okay to give loans as long as you are sure the funds will be returned with interest.”
Despite repeated calls, SICOM was unavailable for comment.