MADHYA PRADESH: LOAN WOLVES

MP decides to give corporate defaulters immunity

When Uma Bharti became MP chief minister in 2003, the ICDS scam was the stick she used to beat the previous Digvijaya Singh government with. More than a decade later, the Shivraj Singh Chouhan government has announced an amnesty scheme for corporate groups who owe the staterun MP State Industries Development Corporation (MPSIDC) for loans it extended under the Inter Corporate Deposit Scheme (ICDS).

Between 1995 and 2001, MPSIDC borrowed money from banks and forwarded them as loans under ICDS to 42 corporate groups. Not only did this violate a 1994 cabinet decision forbidding MPSIDC from disbursing loans, public servants also flouted rules in sanctioning such loans. Amounting to about Rs 400 crore then, the dues have now gone up to Rs 4,000 crore, including interest. At least 20 of these corporates have cases by the state’s Economic Offences Wing pending against them.

Under the new amnesty scheme announced by the state industries department last month, corporate defaulters

AT LEAST 20 FIRMS HAVE CASES BY THE ECONOMIC OFFENCES WING PENDING AGAINST THEM

have been asked to submit proposals to repay the MPSIDC. If approved, it would ensure no further criminal action is to be taken against them, provided dues were repaid before June 30, 2017.

“It seems unfair that criminal action should be taken against someone willing to repay the money,” says state industries minister Rajendra Shukla. “We have corrected that. A one-time settlement scheme was brought in earlier too, we have just fixed a final date to it.” He was referring to the earlier 2004 settlement scheme, under which 18 companies had paid up money.

Facing criticism that immunity from criminal action would weaken ongoing cases, Shukla said, “There’ll be no impact on cases already in court.” The 18 corporate groups that had repaid dues under the earlier scheme had not been given immunity. “Why won’t they ask for it now,” asks an EOW officer.

In the legal opinion he had given at the time, then state advocate general R.N. Singh had said settlement and criminal action were separate things. The state government seems to have overlooked that piece of advice.

A handy political tool, the EOW was tasked with trying to find out if former CM Digvijaya Singh and former industries ministers Rajendra Singh and Narendra Nahata had a role in the ICDS scam. Chouhan used it to cut short former chief secretary Vijay Singh’s tenure. A number of senior civil servants too have been booked in the case. Yet, 13 years on, there has been no conviction. The state government seems more keen on settling matters rather than raking them up. Could the ICDS scam have outlived its political utility?