Congress leader and former Chief Minister of Madhya Pradesh, Digvijaya Singh is all set to be questioned by the Economic Offences Wing of the state with regards to a 719 crore rupees scam in the MP State Industrial Development Corporation (MPSIDC) while he was the CM of the state. Digvijaya Singh was the CM of MP for two tenures from 1993 to 2003, after which Congress is yet to win an assembly election in the state.
What was the scam?
In order to understand the scam, first we need to know what ICD or inter corporate deposits are. ICDs are essentially a short term loan provided by one corporation, which has surplus cash, to another corporation in need. MPSIDC, a public sector entity, loaned out about Rs 663 crores in 1998 to select industrialists and charged 18-21% interest. The problem happened when some of the ‘select industrialists’ didn’t repay the loans to the tune of Rs 375 crores, which thanks to the interest rate has now accumulated to about Rs 719 crores in today’s date.
Another hitch in the ride is the fact that unlike the textbook definition of ICD, where a corporate with surplus cash loans out money, MPSIDC in order to loan out the funds actually proceeded to issue bonds which were brought by Banks like IDBI, Maharashtra District Central co-op Bank and others who have been haranguing the MPSIDC for repayment.
In what might be a classic case of Crony Capitalism, the bonds which essentially raised public money were alleged to have been given to ‘select industrialists’ without any guarantee of repayment. The biggest defaulters are reported as Enbee Group, Alpine Industries, Ishar Group, Jagdish and Ajay Arora of the Som Group and G.K. Rathi and Dilip K. Rathi.
How is Digvijaya Singh involved:
As the scam took place during his tenure as CM he could be held culpable for the same. But it has been further alleged that among the select industrialists, there were Alpine Industry’s Jamboo Bhandari who has been dubbed close to Digvijaya Singh and Anoop Bishnoi, son-in-law of the former Haryana chief minister Bhajan Lal.
Just more problems for Digvijaya?
Back in 2015, an arrest warrant was issued against Digvijaya in an assembly recruitment scam, and just a few months back he was questioned by the EOW with respect to the the government decision to waive off penalty imposed on RKDF engineering college in 2000-01 and 2001-02.
Also, former AAP leader Prashant Bhushan has shared a handwritten note which he alleges contains details of payoffs by Sahara to certain politicians. While the Supreme Court has not accepted such notes as proof, Congress Vice President Rahul Gandhi is using those to attack the Modi government. Well, if Congress party believes that the notes are genuine, it contains Digvijaya Singh’s name alleging that he received 25 lakh rupees as bribes from Sahara.