Why is Modi bailing out Jet Airways, asks Congress

The Congress on Wednesday questioned the Modi government's proposal to bail out Jet Airways which has registered over Rs 7,000 crore losses, and demanded to know if every private firm will be bailed out at the cost of the public exchequer.

"Reports in public domain now reflect that PM Modi wants to give a 'bailout package' to Jet Airways which has a loss of Rs 7,355 crore and which owes Rs 8,500 crore to banks," Congress spokesman Randeep Singh Surjewala said.

"India's leading public sector bank, SBI, and other banks including Punjab National Bank, Canara Bank, Syndicate Bank and Allahabad Bank are now being used by Prime Minister Modi for this purpose," he added.

London-based NRI businessman Naresh Goyal owns 51 per cent of Jet Airways while 24 per cent shares are owned by Etihad Airways.

The company defaulted on its loans in December 2018. An investigation into financial irregularities and siphoning of funds is currently underway.

"By directing the SBI and other PSU Banks to convert Rs 8,500 crore debt for equity shares of Jet Airways valued at Re 1, State Bank of India (SBI) and other banks will thus become owner of 50 per cent of a bankrupt private airline," Surjewala said, adding that this was being done without any independent financial valuation of Jet Airways or any due diligence.

"A foreign company, Etihad Airways, will be given a bail out package by offloading of its 24 per cent shareholding to National Infrastructure Investment Fund (NIIF) for Rs 150/share without any valuation or due diligence.

"The private players will walk away happily, while the government of India and PSU banks will be now running a bankrupt private airline. On one hand, Modi government is seeking to privatize Air India and on the other hand they are buying a bankrupt private airline with public money," Surjewala said.

"Will the Modi government now save every defaulting crony capitalist out of public funds?" he said, adding that public money of the ONGC was used to buy out a "scam ridden, collapsing GSPC for Rs 7,700 crore", while savings of 38 crore LIC policy holders worth Rs 9,000 crore were used to save the IDBI Bank.

--IANS

mak/vd