Is govt's take over of IL&FS a cover-up, asks Congress

Congress on Monday slammed the Modi government for taking control of infrastructure finance firm IL&FS and wondered whether the move was a cover-up of its mishandling of the situation.

Senior Congress leader Manish Tewari accused that the Modi government was in panic mode in handling the IL&FS debt crisis citing reports of government lawyers telling National Company Law Tribunal that many mutual funds would collapse if IL&FS collapses.

“Who is responsible? What was RBI doing? Why was finance ministry sleeping,” Tewari, a former union minister, asked.

The Congress leader wanted to know what were the nominees of the Life Insurance Corporation, State Bank of India and the Reserve Bank of India on the IL&FS Board doing when the debt crisis broke out.

“Is this a takeover or a cover-up,” Tewari asked.

Congress has been attacking Prime Minister Narendra Modi on its handling of the IL&FS issue claiming that it was the “Lehmann Brothers moment” for the BJP government.

Congress President Rahul Gandhi alleged that the Modi government was using public money to bail out the debt-ridden IL&FS.

Congress has also called for a forensic audit of the group over the disbursement of Rs 42,000 crore in the last four years.

“The Modi government's economic mismanagement has left the IL&FS into a precarious financial situation, whereby it does not have the required cash to even sustain them and pay their employees and other dues. Is this the Lehman Brothers moment of the Modi government,” Congress spokesman Gourav Vallabh had said on Saturday.