The Congress on Wednesday accused Prime Minister Narendra Modi of using public money to bailout Jet Airways by converting its debt into equity.
“India’s leading public sector bank SBI and others banks like Punjab National Bank, Canara Bank, Syndicate Bank and Allahabad Bank are now being used by Prime Minister Modi to bail out Jet Airways … Public money of ONGC was earlier used to buy out Gujarat State Petroleum Corporation for Rs 7,700 crore. Hard earned savings of 38 crore LIC policy holders worth Rs 9,000 crore was used to save IDBI Bank,” Congress communication department head Randeep Surjewala claimed.
With Etihad Airways refusing to play ball and declining to put more funds in the struggling Jet Airways, The Indian Express reported Wednesday that lenders led by State Bank of India and the National Investment and Infrastructure Fund (NIIF) may end up acquiring the 24 per cent stake of Etihad Airways and inject more funds.
Surjewala further said the government is planning a bailout package for Jet Airways even as investigation into financial irregularities and siphoning of funds is currently underway.
“Reports in public domain now reflect that Prime Minister Modi wants to give a bailout package to Jet Airways. By directing SBI and other PSU Banks to convert Rs 8,500 crore debt for equity shares of Jet Airways valued at Re 1, SBI and other banks will thus become owner of 50 per cent of a bankrupt private airline,” Surjewala said.
He also said the government has directed NIIF to buy Etihad Airways 24 per cent stake at a value of Rs 150/share.
“This is being done without any independent financial valuation of Jet Airways or any due diligence. The Modi government is in such a hurry that they are not even willing to await the result of their own investigations,” he said.
Asking the government to explain why it is giving a bailout package to Jet Airways owned by Foreign Investors, he said, “Private players will walk away happily, while Government of India and public sector banks will be now running a bankrupt private airline. On one hand, the Modi government is seeking to privatise Air India and on the other hand they are buying a bankrupt private airline with public money.”