New Delhi: SBI sanctioning USD 1 billion loan to Adani group’s coal project in Australia was on Thursday raised in Rajya Sabha by Derek O’Brien (TMC), who said it smacks of crony capitalism.
Raising the issue during Zero Hour, he said SBI has signed an MoU pledging one of the single largest loans to a corporate house despite five international banks refusing to lend to the Adani project.
Five leading global banks – Citibank, Deutsche Bank, Royal Bank of Scotland, HSBC and Barclays – had declined to fund the project citing decline in coal mining in Australia, coal prices falling by 50% and environmental issues, he said. “What prompted SBI to lend” to Adani when global banks had declined to do so, he asked.
He said while Coal Minister Piyush Goyal has stated that coal imports to India will end in 2-3 years, Adani’s Australia project is to export 2/3rd of its output to India.
Without naming Adani Group Chairman Gautam Adani, he said, “this gentleman was with the Prime Minister every day” during Modi’s visit to Australia.
SBI committed itself to sanction the loan over a breakfast meeting where Modi as well as Adani and the public sector bank’s chairman were present, he said. Adani was in the business delegation when Prime Minister visited United States, Japan and Australia. “It gives bad impression,” he said.
The TMC leader said he had no problem with government being business-friendly but “we have problem regarding crony capitalism.”
Parliamentary Affairs Minister M Venkaiah Naidu said there were 20 people in the business delegation that went to Australia. “Adani is not Quattrochi (with whom business cannot be done),” he remarked.
O’Brien said Adani shares have gone up by 85% in last 10 months. Members from Left, Congress and SP associated themselves with the issue raised by the TMC member.
Naidu said the member had every right to raise the issue about a loan extended by SBI to a corporate house but “taking name of Prime Minister is highly objectionable”.
Earlier, SBI said it had only signed a preliminary MoU and would disburse the money only after proper due diligence. “We clarify that this is a memorandum of understanding. This is not a loan sanction that we have given. It will go through proper due diligence both on the credit side as well as on the viability side,” SBI chairperson Arundhati Bhattacharya had said.