Congress, Piyush Goyal spar over ‘conflict of interest’
Railway minister Piyush Goyal said he has no conflict of interest at Shirdi Industries because he had resigned from it on July 1, 2010, and maintained that the inter-company loans were taken on commercial terms and tax was deducted and paid on interest regularly.Updated: Apr 05, 2018 08:50 IST
The Congress accused Piyush Goyal of “impropriety and conflict of interest” on Wednesday, alleging that a company he was associated with in the past was given a “haircut” loan waiver of 65% on the outstanding loan amount of more than Rs 650 crore, a charge the Union railway minister denied saying he had followed the “highest standards” of ethics and disclosure.
Addressing a news conference, Congress leaders Ghulam Nabi Azad, Veerappa Moily and Pawan Khera alleged that Goyal was chairman and whole-time director of Shirdi Industries from April 25, 2008 to July 1, 2010, during which the company took a loan of Rs 258.62 crore from a consortium of banks headed by Union Bank of India.
The main opposition party demanded his “immediate sacking” and a probe by a sitting Supreme Court judge into the entire issue.
In a statement, Goyal said he has no conflict of interest at Shirdi Industries because he had resigned from it on July 1, 2010, and maintained that the inter-company loans were taken on commercial terms and tax was deducted and paid on interest regularly.
Goyal described Congress’ allegations as malicious and misleading, and said it had made incorrect conclusions with false and defamatory statements that were full of factual inaccuracies, mixing up of dates, and alluding to events with no relevance to Goyal’s association with Shirdi Industries Ltd.
Azad said that Goyal later resigned from the company’s board and the firm was subsequently declared sick due to its inability to repay loans. However, after the National Democratic Alliance (NDA) came to power at the Centre, 65% of the outstanding loan amount of Rs 651.87 crore was “shockingly” waived by the consortium of banks without any objections, he alleged.
Moily alleged that Asis Industries, a sister concern of Shirdi Industries, granted an unsecured loan of Rs 1.59 crore in 2015-16 to Intercon Advisors, a company owned by Piyush Goyal’s wife Seema Goyal.
“Is it not a clear case of conflict of interest and impropriety on the part of Piyush Goyal? Why did Shirdi Industries through its sister concern Asis Industries extend an unsecured loan of Rs 1.59 crore to the minister’s wife Seema Goyal’s company? Why did Piyush Goyal not declare this loan in his public filing on PMO website?” asked Azad.
Goyal, however, said there was no fresh loan approved of Rs 258.62 crore. It was only an enhancement of the existing loans from Rs 181.82 crore (increased by 40% in the normal course of business), adding he was neither a Member of Parliament nor a Director of State Bank of India (SBI) at the time of enhancement and hence there was no question of influencing it.
He said in the statement that the loan from Asis Industries to Intercon Advisors was not given in 2015-16, as alleged by the Congress, but on September 24, 2012, two years after Goyal left the company, and was taken in the normal course of lending from Asis Industries at an interest of 12% per annum, which was higher than prevailing market rates. “The Congress cannot distinguish between a pure commercial transaction and the corrupt practices regularly indulged in by the opposition party and its leaders,” Goyal added.
Azad said the Insolvency and Bankruptcy Code Amending Act, 2017 prohibits a promoter of a sick company from submitting bids before the National Company Law Tribunal (NCLT). “Shirdi Industries went to NCLT. Outstanding loan amount of consortium of banks was Rs 651.87 crore. Shockingly, the consortium of banks agreed to take a haircut (waiver) of 65% of loan amount and settled for Rs 228.85 crore,” he alleged.
But Goyal said the Congress was casting aspersions on the NCLT, which is an independent judicial body and is reported to have accepted the resolution plan as approved by Committee of Creditors much before the NCLT ordinance of November 2017. “Nobody can influence the judiciary. It is unfair that Congress has tried to drag the judiciary (into controversy) for its petty politics,” he said.