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Congress says insolvency makes banks bankrupt, thus nation can’t survive

IndiaCongress says insolvency makes banks bankrupt, thus nation can't survive

Addressing a press conference, Congress leader Sanjay Nirupam addresses the dangers of insolvency causing banks in dept to ruin the nation.

Amtek Auto Scam

Sanjay Nirupam said the government must order a probe into the findings of Ernst and Young’s audit report into the insolvency of Amtek Auto and demanded a CBI investigation into Amtek insolvency.

The report notes that Amtek group has carried out preferential transactions, transactions defrauding creditors, and it siphoned off more than 70 percent of its assets and funds to 129 shell companies, Nirupam said.

“The Amtek group of companies took a loan of Rs 25,000 crore from Indian banks. The company was eventually sold for Rs 1,500 crore. Its promoters wrote off assets worth Rs 7,500 crore, and Rs 12,500 crore funds were siphoned off through shell companies,” he said, citing EY report.

He said that the biggest scam ignored is the huge Amtek Group of Companies, which makes auto parts, headquartered in India, one of the largest integrated component manufacturers in India with a strong global presence. With a debt of 25,000 crores, it redeemed itself with an insolvency case.

Of note, a top brand that comes out of Amtek is Barista Coffee.

Addressing the press conference along with Nirupam, Congress spokesperson Pawan Khera stated that in the name of resolving the insolvency cases of the companies, institutional corruption is going on.

Background of the Alleged Scam

It all started in May 2016 when the government of India made a new law, insolvency and bankruptcy code whereby the government made a route for corporate companies that if they are having difficulties or were in danger of default, they can go for NCLT(National Company Law Tribunal) liquidation.

Since that time, there is a devious trend used by corporates to fleece banks by applying to go under the protection of insolvency cases and come out safe, however, leaving the banks totally drained and “looted” of their money.

The IBBI (Insolvency and Bankruptcy Board of India) informs that from Dec 2017  to Dec 2021, there were 4,946 cases admitted by IBBI, implying that in India, there were 4,946 bankrupt companies. The IBBI never mentioned the amount of money involved but went on to say they resolved over 457 cases as of 2021.

The banks reportedly lost 8.3 lakh crores out of these over 457 companies.

IBBI reports out of 8.3 lakh crore, 2 lakh 70,000 remain with the bank. Bank has lost 6 lakh crore and this is only speaking about 457 companies, just the tip of the iceberg of the remaining 4,946 companies.

Since 2016, there have been startling losses to banks in the name of liquidation from corporates.

Baba Ramdev and Ruchi Soya

Sanjay Nirupam went on to say that Ruchi Soya which had a 12, 000 crore debt, baba ram took it for 4.30, 000 crore. The deal was that Baba Ramdev, an Indian businessman, and guru was to give 1000 crores upfront and the bank was to give him a loan of 3000 crores the bank was to give him a loan of the remaining amount, the very bank that has lost money!

Ruchi Soya was a public listed company on the stock exchange where the rule holds that there has to be a minimum of 25% shareholdings with the public. Baba Ramdev broke all protocol, froze all shares, made it zero value, and removed all the small investors.

People are calling it legalized loot where Baba Ramdev will own 80% of a 31000-crore company with no investment!

People are calling it legalized loot where Baba Ramdev will own 80% of a 31000-crore company with no investment!

While the BJP gov keeps looking back at the policies of UPA, they are least bothered that the banks are on the verge of bankruptcy.

Sanjay Nirupam said that “Earlier, we heard of ABG loot story where funds to the tune of 23,000 crores (Rs 22,842 to be precise)were allegedly used for unstated purposes, investments were made through a Singapore-based subsidiary and there were payouts running into hundreds of crores to related parties. Properties were also bought from the funds provided by ABG Shipyard.”

Demanded CBI Probe

During the press conference, Congress leader Sanjay Nirupam also stated that the government must order a probe into the findings of Ernst and Young’s audit report into the insolvency of Amtek Auto.

“No one but the Central Bureau of Investigation (CBI) can probe this matter because it seems the Ministry of Corporate Affairs is hand in glove’, Serious Fraud Investigation Office is short-staffed, and National Company Law Tribunal (NCLT) also seems to be a part of this scam’,” Nirupam alleged.

The swindling by the promoters of Amtek must be probed, he demanded.

Citing official figures, Nirupam said that in the last five years, six lakh crore of banks’ money has been lost.

Modi’s government must come out with a white paper on all such insolvency cases, Nirupam said, accusing the government of shielding promoters of several firms that have filed for insolvency recently.

“Nirmala Sitharaman ji always says these companies took loans during the time of the UPA. But the loan defaults and the loss of money is going on under the Modi government,” Nirupam said.

Insolvency Making Banks Bankrupt And Nation Cannot Survive This Way

Notably, the money lost in banks is the people’s money, the nation’s money, and the government’s money. The State bank of India is getting hit the most, and making the nation bankrupt is going to destroy the nation.

You might want to read https://hamslivenews.com/2022/01/19/while-poverty-rises-billionaires-in-india-increase-during-covid-19/

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