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FinMin writes to RBI in support of ADAG`s borrowing plans

Last Updated: Sunday, November 8, 2009 - 15:49

New Delhi: Finance Ministry is understood to
have supported Anil Ambani group`s plans to raise USD 1.1
billion of overseas loans for power business and suggested to
the RBI that entities should not be denied a nod on account of
alleged violations by end use of funds by other group firm.

Anil`s group firms had sought permission to raise over Rs
5,000 crore for two power projects and in this connection are
understood to have approached the Finance Ministry.

The group spokesperson could not be reached for comments.

Following the representation made by the group having
interests in telecom, infrastructure, entertainment and
financial services, the Finance Ministry has asked the central
bank to reconsider their proposal for raising over Rs 5,000
crore of loans from foreign markets.

The RBI had earlier said that the application could be
considered only after resolution of ongoing investigations
into alleged violation by some ADAG firms of guidelines
related to use of foreign funds.

Upon RBI`s objection to grant of approval for raising 550
million dollars each for sourcing of capital goods for the
group`s Rosa and Vidharba power projects, ADAG told the
Ministry and argued that such approvals could not be denied
for an entity, for want of resolution of alleged violations.

It argued that a blanket bank on the entire group would
lead to the various other group companies being unable to
arrange funds for projects of national importance.

Bureau Report

First Published: Sunday, November 8, 2009 - 15:49
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