'Economy will not progress if we tag Nirav Modi or Mallyaji as fraudster', says Nitin Gadkari

Last Updated: Fri, Dec 14, 2018 18:44 hrs
Nitin Gadkari

According to Union Minister Nitin Gadkari, it is unfair to tag the “one-time loan defaulter Vijay Mallyaji” as a “chor” (thief).

Gadkari who was speaking at the an Economic Conference organised by the Times Group pointed out that Mallya, a businessman had a four-decade-long track record of financing his debts.

Gadkari was quoted as saying at the conference, "40 saal Mallya regular payment kar raha tha, byaaj bhar raha tha. 40 saal baad jab wo aviation mein gaya....uske baad wo adchan mein aaya to woh ekdum chor ho gaya?... Jo pachaas saal byaaj bharta hai wo theek hai, par ek baar wo default ho gaya... Toh turant sab fraud ho gaya? Ye mansikta theek nahi hai."

[Translation: For 40 years Mallya was regularly paying interest on loans. After entering the aviation sector, he started facing problems, and suddenly he became a thief? If a person repays the interest for 50 years, and if he defaults once, then suddenly everything is fraud? This mindset is not correct]

The 40 years Gadkari is referring to was a loan from government owned Sicom to Mallya. The minister said that Mallya had paid this loan on time without any defaults.

While speaking on the aspect of risks in business, he said, "If Nirav Modi or Vijay Mallyaji has committed (financial) fraud then send them to jail, but whoever comes in distress, and if we label them as fraudster then our economy will not progress."

Referring to the ups and downs in business, Gadkari said, "There are risks in the business, be it banking or insurance, there are ups and downs. But, if the mistakes are bona fide, because of global or internal factors in the economy like a recession, then that person who is facing difficulties must be given support."

Gadkari also used his own example to imply that failure is temporary. He said, that he faced failure in elections at the age of 36. He added that this loss did not end his political career.

The minister in reference to how NPAs are dealth with, quipped, "When someone is serious then we put him/her in an ICU, but our banking system first puts a sick company in the ICU and then ensures that it dies."

This is not the first time that the minister has complained about the way NPAs are tackled. Last month, he complained that the RBI was "complicating" project finance. He said over 150 projects involving Rs 2 lakh crores was struggling to get a financial closure. Back then, he said, "Unfortunately, many times ...the circulars issued by the RBI are creating more complications and this is one of the reasons why I am facing problems as far as financial closure is concerned," Gadkari had said.

Meanwhile, Indian public banks have responded favourably to news that Mallya's extradition is around the corner. The Westminster court in London ordered the 62 year old Mallya to be extradited. Although Mallya has offered to pay the principal amount, bankers who had lent to India's Richard Branson were gung-ho on the prospects of receiving the principal plus interest. This, with the renewed enthusiasm that Mallya is coming back.

On the day of the UK court's announcement, media reports said that the Arthur Road Jail in Mumbai, where Mallya could be held, was being decked up to welcome a new guest.

Nirav Modi and his uncle Mehul Choksi, although are still far away from the judiciary's reach.