NPAs shadow on PM’s council

Answering questions that alleged the group had diverted Rs 11,000 crore, Singh said the figure under question was actually Rs 7,138 crore. He, however, refused to give a categorical reply on whether the funds had indeed been diverted.

He said if funds were diverted, his ministry had no independent mechanism to go into all the lending that took place to establish whether fund had been diverted or not. Each of the financial institution had its own method or mechanism to determine the fund diversion and other violations, he said.

In a faxed response on the discussion, the Essar Group said the controversies were being raised again and again by ‘some vested interests’, and that the issue had been investigated by government agencies like the Department of Company Affairs, CVC and Sebi where all these allegations were not substantiated. The company said that its dealings were ‘fair and transparent’.

Answering the question raised by Amar Singh, the Finance Minister said that the government had ‘no difficulty in enquiring into accounts of the group under the Companies Act if it was warranted.’

Jaswant Singh, however, said the information provided to him by financial institutions including IDBI clearly showed there had been no ‘double financing to the assisted projects of the Group’ — this was one of the allegations made by the MPs who said, based on newspaper reports, that the group had hived off projects to get double financing.

While Singh said he could provide no additional information because of banking secrecy clauses, he said a Bill making it obligatory for banks and FIs to reveal relevant information in all such cases had been introduced in Parliament and would be taken up for discussion in the current week.

The minister said the IDBI had classified the account of Essar Power as non-performing asset (NPA) as on March 31, 2001. But it was upgraded as a performing asset on March 31, 2002 on the basis of payment made by the company towards clearance of dues during 2001-02.

After 45 minutes of discussion, Rajya Sabha Chairman Krishan Kant said 20 more members were seeking to speak on the issue. On demands by some members that a separate discussion should take place on the issue, Kant said a notice could be given by members to this effect.