Sack Piyush Goyal, Says Congress, Minister Attacks 'Spit and Run' Politics

New Delhi: The Congress party on Wednesday sought a judicial probe by a Supreme Court judge into the business affairs of railway and coal minister Piyush Goyal and his family.  In a press conference addressed by senior party leaders M. Veerappa Moily, Ghulam Nabi Azad and Pawan Khera, the party also demanded hGoyal'sis dismissal from the Narendra Modi cabinet, saying that his links and association with the promoters of a defaulting  company made his position as a Union minister "untenable".

The Wire had reported on how Shirdi Industries – a company that Goyal was a director in till 2010 – eventually ended up defaulting on loans worth Rs 650 crore, after he had left. The report also stated that the company's promoters had extended an unsecured loan through another entity to a company run by Goyal's wife, Intercon Advisors Pvt Ltd.

The Congress intimated the Rajya Sabha chairman of its intention, under Rule 238A, of raising the issue in the house and demanded a statement from the prime minister and Goyal himself on the floor of the house, since parliament is in session.

A few hours later, on Wednesday night, Goyal hit back at the Congress, calling its accusations against him "another episode of Congress 'spit and run' style of politics to divert attention from main issues relating to the common man."

'Suppression by Goyal'

"Is it not suppression that Goyal did not disclose this on the PMO website, giving details of his association with the company?" asked Congress Rajya Sabha leader Ghulam Nabi Azad at a press conference in the capital today. "Why did Piyush Goyal not declare this loan in his public filing available on PMO website?"

"It seems the minister is enjoying immunity despite several violations of banking laws," said Congress leader Veerappa Moily.

Accusing the Centre of gross violations of the law, the Congress said that the skeletons of "bank loot scams" keep tumbling out of the Modi government’s cupboard, and now the tale of "conflict of interest, sweetened deals, gross impropriety and bank loan defaults" by Shirdi Industries Ltd, with past and present affiliations to Goyal and his family, "is out in the open".

Targeting the prime minister and finance minister, the Congress said, "The nation has always asked the reason behind the ‘maun vrat’ – vow of silence – of Prime Minister Narendra Modi and finance minister Arun Jaitley on 11 different banking scams worth a whopping Rs 61,036 crore. Is it because the ‘chowkidar’ (referring to Modi) is guarding his own?" the party asked.

Posing questions to the government, the Congress described the situation as a clear-cut case of "conflict of interest" and "impropriety" on the part of Goyal.

Goyal was chairman and whole-time director of Shirdi Industries Ltd. from April 25, 2008 to September 20, 2009, and then a non executive director till July 2010. During this time, Shirdi Industries Ltd. took out loans worth more than Rs 252 crore from a consortium of banks, headed by the Union Bank of India, said the Congress.

The party leaders produced a copy of Goyal's appointment letter as director from April 25, 2008, along with Goyal's resignation dated July 1, 2010. They also produced a copy of documents dated October 4, 2008 and March 29, 2010, with details of the loans.

In May 2014, the Modi government came to power and Goyal was inducted as a Union minister. On June 8, 2015, Shirdi Industries Ltd. was declared "sick".

Despite the fact that Shirdi Industries Ltd. (of Rakesh Agarwal and Mukesh Bansal) was experiencing difficulty servicing its loans to the banks and eventually defaulted, its sister company, Asis Industries, had made an unsecured loan to Intercon Advisors Pvt. Ltd., a company owned by the Union minister's wife, that in FY 2016 had grown to Rs 1.59 crore.

Continuing its attack, the Congress asked, "Did Union minister Piyush Goyal declare his status as a chairman/whole-time director of Shirdi Industries Ltd., in light of the fact that loans worth Rs 258.62 crore were raised from UBI consortium during his tenure and the company became ‘sick’ on June 8, 2015, finally leading to a default of Rs 651.87 crore of public money?"

Congress spokesperson Pawan Khera also added to the questions raised. "What is the special relationship between Goyal and family on one hand and Rakesh Agarwal/Mukesh Bansal on the other hand? Are they not connected through a web of companies, be it Shirdi Industries Ltd, Pradeep Metals Ltd. and Sajal Finance Investments Pvt. Ltd? Who are the other players, who are the business associates of Goyal and what are their business interests and connections?"

The party also had questions for the banks involved. "Why did the consortium of banks, namely the Union Bank of India, SBI, UBI, Bank of India, Indian Bank and Standard Chartered Bank, take a ‘haircut’, that is a loan waiver, of nearly 65% on the outstanding loan amount of Rs 651.87 crore of Shirdi Industries Ltd. of Rakesh Agarwal and Mukesh Bansal? How was a promoter permitted to bid for the company despite the prohibition under the Insolvency Code? Was the consortium of banks influenced in any manner to accept the 65% ‘haircut’?"

Piyush Goyal's response

In his statement, Goyal accused the Congress of being in the "habit of repeatedly indulging in malicious campaigns which are full of factual inaccuracies."

Acknowledging only a "brief association with Shirdi Industries Ltd", Goyal said that he "was an Investment Banker and is a chartered accountant, during which time he was associated with Shirdi Industries Ltd. as a whole time director for a brief period from 25th April 2008 till 30th September 2009 and, thereafter served as non-executive chairman till 1st July 2010, when he resigned."

Loans to Shirdi

Goyal said that there was "no fresh loan approved of Rs. 258.62 crore as claimed by the Congress. It was only an enhancement of the existing loans from Rs. 181.82 Cr (increased by 40 % in the normal course of business)."

During this time, said Goyal, he was "neither a member of parliament nor a director of the State Bank of India (SBI)" and  "hence, there is no question of [his] influencing this loan enhancement."

Loan to Goyal's wife

Goyal said the the loan from Asis Industries to Intercon Advisors was made on September 24, 2012, "a good two years after [he] Goyal left the company, and was taken in the normal course of lending from Asis Industries at interest of 12% per annum which was higher than prevailing market rates."

He said the Congress "cannot distinguish between a pure commercial transaction and the corrupt practices regularly indulged in by Congress and its leaders."

Shirdi's troubles relate to Congress rule

The "issues after 2010 in Shirdi Industries" had "nothing to do with Goyal as he has no role in the company after 1st July, 2010, and any distress the company had relates to 2013 when Congress was in power," said the minister. "In any case,[he] has had no relationship with Shirdi Industries since the last 8 years and is not responsible for their issues. None of the ministries handled by  Goyal dealt with this company."

NCLT an 'independent body'

Goyal's statement also hit out at the Congress for "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 NCLT ordinance of November 2017."

According to this plan, the owners of Shirdi were able to regain control of the company – in an exception to the ordinance's ban on promoters buying back their companies at a discount after the NCLT helped to write off their debt.

"Nobody can influence the judiciary," said Goyal, adding that it was "unfair that Congress has tried to drag the judiciary for its petty politics."

'No wrongdoing'

Rejecting the Congress's charge of wrongdoing on his part, Goyal said he is being "targeted for vested political interest, possibly to deflect attraction from the repeated scams of Congress and its leaders."

Note: This story has been updated to include Piyush Goyal's statement issued on Wednesday night in response to the Congress's press conference.

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