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November 27, 2014

Derek O’Brien raises the issue of SBI loan to Adani Group in RS

Derek O’Brien raises the issue of SBI loan to Adani Group in RS

Trinamool MP Derek O’Brien today raised the issue of SBI loan to Adani group, saying it was an example of crony capitalism.
He demanded to know what prompted the State Bank to pledge a loan when five multinational banks declined it? He said he was not parroting rhetoric but speaking on facts.
Full transcript of his speech:
Sir, I want to place before this house of the latest example of crony capitalism. We have no problem if government works closely with the industry. No problem at all… But look at this… SBI has pledged to lend One billion USD i.e. Rs 6000 crore to Adani group.  Let me tell you what is the problem with this… no rhetoric but facts.
This is the largest loan given by any Indian Bank. State Bank is pledged to lend Rs 6000 crore but they have signed MOU for Rs 200 crore. Five leading banks of the world – Citi Bank, Deutche Bank, Royal Bank of Scotland, HSBC and Barclays denied giving funds for this project in Australia. They denied giving funds because they said coal mining in Australia is in structural decline and they said coal prices are falling by 50 percent for the last three years and it will continue to fall.  They also gave some environmental reasons I do not want to get into that.

What prompted the State Bank of India to do this when the Coal Minister has gone on record saying he wants to end import of thermal coal in the next three years? The Adani group intends to import two thirds of coal from Carmichael into India.  Sir, this loan is going from State Bank, which already has Rs.2.5 lakh crore on its books.

Sir, these are the facts of the case but the other perception of the case is even worse.  This gentleman was with the PM everyday and when people wrote about it they got into trouble. Through his trip in United States of America, through those meetings there in Brisbane he was there on November 17, 2014.

It gives a bad impression to the world when you are going to sign an MOU and going to get a bank loan of Rs 5000 or 6000 crore, you have breakfast meeting with the SBI Chairman, Prime Minister and a third person. As it is there is a perception; because of this perception the Adani share has gone up 85%, tripled, in the last three months.