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Trinamool slams SBI's $1-bn loan to Adani group

Party MP Derek O'Brien raises matter in Rajya Sabha, claims five international banks had refused to fund the mining project in Queensland.

business Updated: Nov 27, 2014 15:06 IST

The Trinamool Congress on Thursday objected to government-owned State Bank of India (SBI) sanctioning $1 billion as loan to the Adani group's coal project in Australia and called it "crony capitalism".

Derek O'Brien, the party's MP, raised the issue during Zero Hour in Rajya Sabha and said SBI had signed an MoU pledging a loan though five international banks had refused to fund the Adani project in Queensland state. Citibank, Deutsche Bank, Royal Bank of Scotland, HSBC and Barclays had declined loans citing decline in coal mining in Australia, coal prices falling by 50% and environmental issues, he said.

"What prompted SBI to lend" to Adani, said O'Brien. The MP claimed that coal minister Piyush Goyal has stated that coal imports to India will end in 2-3 years, but Adani's Australia project is to export two-thirds of its output to India.

The loan, which would be one of the largest extended by an Indian bank for an overseas project, was announced when group chairman Gautam Adani was in Brisbane with a business delegation for the G20 summit, which Prime Minister Narendra Modi attended.

Without naming Gautam Adani, O'Brien said: "this gentleman was with the prime minister every day". The loan was committed over a breakfast meeting attended by Modi, Adani and SBI's chairperson, he said. Adani was in the business delegation when Prime Minister visited United States, Japan and Australia. "It gives bad impression," he said.

The TMC leader said he had no problem with government being business-friendly but "we have problem regarding crony

Parliamentary Affairs Minister M Venkaiah Naidu said there were 20 people in the business delegation that went to
Australia. "Adani is not Quattrochi (with whom business cannot be done)," he remarked, referring to Italian businessman Ottavio Quattrocchi who was sought by Indian authorities in connection with the Bofors gun scandal.

Naidu said the member had every right to raise the issue about a loan extended by SBI to a corporate house but "taking
name of Prime Minister is highly objectionable".

Left, Congress and Samajwadi Party associated themselves with the issue raised by the TMC member.

First Published: Nov 27, 2014 14:34 IST