Finance Minister Arun Jaitley accused the Congress party of spreading disinformation about the government’s “possible moves in relation to the private sector company IL&FS”.

The Infrastructure Leasing & Financial Services (IL&FS), an infrastructure group whose debt defaults have reportedly led to fears of contagion in the markets and a liquidity crisis, will be taken over by the government.

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“The Congress is a national saboteur. It wants to sabotage India’s economy by allowing a situation in relation to a company to persist, expand and become unmanageable. It lacks statesmanship and vision,” he said in a Facebook post.

In a direct attack on Congress president Rahul Gandhi, Jaitley asked if the promotion of IL&FS with the Central Bank of India and the UTI was a scam.

“The financial institutions’ investment in any company – ‘is it a scam’ as Rahul Gandhi and his coterie are spreading? Was it a scam in 1987 when the IL&FS was promoted with the Central Bank of India having 50.5% shares and the UTI having 30.5% shares?” he asked.

“Was it a scam in 2005 when LIC acquired 15% stake in IL&FS and in March, 2006 when it acquired another 11.10% stake in the IL&FS?  In fact, LIC further bought 19.34 lakh shares in IL&FS in 2010,” wrote Jaitley underlining the investments done by the state-owned insurance group in the private company.

The FM’s comments came after Gandhi questioned the government over its decision to bail out the ILFS on 30 September.

Jaitley also presented a letter written to him by senior Congress leader and former Union Minister Prof. KV Thomas on 20 September 2018 in which the former Chairman of the Public Accounts Committee requested the Centre to support IL&FS through equity and debt from Indian institutional investors such as LIC, SBI and HDFC.

“It demolishes every word that Rahul Gandhi and his coterie has been spreading,” wrote Jaitley.

Gandhi had on 30 September posted two tweets questioning Prime Minister Narendra Modi’s intent in bailing out IL&FS.

लाइटस, कैमरा, स्कैम

सीन 1: 2007, CM मोदी IL&FS कंपनी को 70,000 करोड़ का प्रोजेक्ट GIFT CITY देते हैं। आजतक कुछ काम नहीं। जालसाजियाँ आईं सामने।

सीन 2: 2018, PM मोदी LIC-SBI में लगे जनता के पैसे से 91000 करोड़ की कर्जदार IL&FS को बेलआउट दे रहे हैं।

“चौकीदार की दाढ़ी में तिनका”

— Rahul Gandhi (@RahulGandhi) September 30, 2018

मोदीजी, आपकी चहेती निजी कम्पनी ILFS डूबने वाली है। आप LIC का पैसा लगाकर उसे बचाना चाहते हो।क्यों?

LIC देश के भरोसे का चिन्ह है। एक-एक रुपया जोड़कर लोग LIC की पॉलिसी लेते हैं। उनके पैसे से जालसाजों को क्यों बचाते हो?

कहीं आपके लिए ILFS का मतलब ‘I Love Financial Scams’ तो नहीं?

— Rahul Gandhi (@RahulGandhi) September 30, 2018

Initially promoted by the Central Bank of India, Housing Development Finance Corporation Ltd and the Unit Trust of India, IL&FS was incorporated in 1987.

Over the years, it has inducted institutional shareholders including SBI, LIC, ORIX Corporation of Japan and Abu Dhabi Investment Authority (ADIA).

As on March 31, 2018, LIC and ORIX Corporation are the largest shareholders in IL&FS with their stakeholding at 25.34 per cent and 23.54 per cent, respectively. Other prominent shareholders include ADIA (12.56 per cent), HDFC (9.02 per cent), CBI (7.67 per cent) and SBI (6.42 per cent).

Board recast

The Central government on Monday superseded the management of the beleaguered company by appointing a six-member Board led by banker Uday Kotak to restore the financial solvency of the debt-stricken conglomerate.

“The NCLT (National Company Law Tribunal) suspended the existing board and directed that the suspended members should not represent the company in any form with immediate effect,” an official statement said.

“The NCLT approved the induction of six Directors recommended by the government, in the first instance, consisting of Uday Kotak, MD & CEO of Kotak Mahindra Bank as Non-Executive Chairman and Vineet Nayyar, IAS (Retd.), G.N. Bajpai, former Chairman, SEBI, G.C. Chaturvedi, Non-Executive Chairperson, ICICI Bank, Malini Shankar, IAS and Nand Kishore, IA&AS (Retd.) as Directors,” said Ministry of Corporate Affairs in a statement.

“The new Board shall take up its responsibility with immediate effect, after following due procedures.”

Meanwhile, Finance Minister Arun Jaitley also countered media reports that public sector banks wrote-off loans worth over seven times the recovery amount in the last four years.

He said that the write-offs do not lead to any loan waiver and that the banks continue the recovery process “rigorously.”

“Technical write-offs are resorted by banks as per Reserve Bank of India guidelines. However, this does not lead to any loan waiver. Recovery of loans continues rigorously by banks,” he wrote in a separate Facebook post.

Read More: Write-offs don’t lead to loan waiver, recoveries continue: Arun Jaitley

Jaitley said that as per RBI guidelines and policy approved by bank boards, non-performing loans, including those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank by way of write-off.