Congress President Rahul Gandhi on Sunday lashed out at Prime Minister Narendra Modi for the liquidity crisis in infrastructure lending giant Infrastructure Leasing & Financial Services group, which has recently defaulted on a few loan repayments.
According to reports, the situation is so grim that it is being compared to the 2008 Lehman Brothers crisis that triggered a global financial meltdown.
“Modi ji your favourite company IL&FS is about to go bankrupt, so why do you want to use the money of the Life Insurance Corporation to save it?” Gandhi asked on Twitter. “LIC is a symbol of faith and stability. People save every rupee to buy LIC policies. Why do you [want to] save such frauds with their money? “Hope it is not that for you, ILFS means ‘I Love Financial Scams’.”
The Congress leader tweeted earlier in the day that in 2007 Modi, who was then the chief minister of Gujarat, handed over an infrastructure project to the company that has not been completed yet.
Meanwhile, the shareholders of IL&FS have approved plans to raise money through debt and equity, Mint reported on Sunday. Shareholders allowed the firm to raise Rs 15,000 crore through a non-convertible debt issue, increase the firm’s borrowing limit by 40% to Rs 35,000 crore, and increase its share capital.
The Life Insurance Corporation, the biggest state insurer, is one of the shareholders of IL&FS. Its chairperson VK Sharma on Friday said the firm can raise Rs 60,000 crore by selling assets. The following day, IL&FS appointed global professional services firm Alvarez & Marsal to devise a restructuring plan.
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