IL&FS row: Gujarat govt says they didn't spend anything on GIFT City project

Amid allegations from the Opposition parties, the Gujarat government on Monday claimed that they didn't spend anything on GIFT City project.

The remarks from the government came after the National Company Law Tribunal approved an immediate takeover of crisis-hit IL&FS Ltd's board by six government nominees including eminent banker Uday Kotak, who was named as non-executive chairman of the new board.

The NCLT allowed the Union government's interim prayer to reconstitute the board of IL&FS, observing that the company's affairs were being conducted in a manner "prejudicial" to the public interest.

"It is completely baseless to say that Rs 70,000 crore worth of project (GIFT City) has been handed-over to IL&FS. In all the phases of GIFT City development, only Rs 10,000 cr is projected to be spent on entire infrastructure development," said the Gujarat government.

Stating that not even a rupee in this project was invested by govt of Gujarat except the equity of Rs. 32.5 cr, the government said, "Amount of Rs 60,000 cr was envisaged to be brought in/invested by various pvt companies which would be located in GIFT City project in the coming period of 15-20 years."

The IL&FS group is facing serious liquidity crisis and has defaulted on interest payment on various debt repayments since August 27. It has over Rs 91,000 crore in debt at the consolidated level.

The company needs an immediate capital infusion of Rs 3,000 crore and is planning a Rs 4,500-crore rights issue.

At a meeting held earlier this month, the key shareholders of the debt-ridden company, including LIC, SBI and HDFC, had kept a pre-condition for IL&FS to raise funds through its assets or non-core businesses, before any additional money could be pumped in.

The Congress leader questioned the involvement of the Life Insurance Corporation (LIC) and the State Bank of India (SBI) in the matter.

On Sunday, attacking Modi, Congress president Rahul Gandhi alleged that Narendra Modi was bailing out the debt-ridden Infrastructure Leasing and Financial Services (IL&FS) using funds from the State Bank of India (SBI) and Life Insurance Company (LIC).

"Modi Ji, your favourite private company, ILFS is about to sink. You want to save it by using LIC money. Why?," asked Congress president in a tweet.