CAG raises questions over Rs 52,424-crore bank loans for projects in Odisha
The Comptroller & Auditor General of India (CAG) has raised questions about the legal sanctity of land documents on the basis of which corporate houses setting up steel, aluminium, cement and power projects in Odisha have drawn bank loans to the tune of approximately Rs 52,424 crore.
The CAG’s questions with regard to the legality of land documents is essentially rooted in the fact that the bank loans have been raised by corporate houses by mortgaging the project land in the state.
The questions being raised by the CAG are a matter of grave concern for the banks because the corporate houses have not invested the nearly Rs 52,424-crore loan amount in the projects that are supposed to be constructed on the mortgaged land.
With the bank loans having been availed by the corporate houses on the basis of a no-objection certificate (NOC) issued by the Odisha government-owned Industrial Infrastructure Development Corporation (IDCO), the CAG has drawn attention to the fact that although the lands have been allotted by IDCO to corporate houses for the projects, the corporation does not have any authority to issue NOC for mortgaging the land.
CAG further clarified that the land which IDCO had sub-leased to promoters of industries had been taken on lease by the corporation from the state government. As such, since the government owns the land, IDCO cannot issue NOC without the power which the government has vested in it.
CAG said: “IDCO irregularly issued No-Objection Certificates (NOC) to 26 MoU based industries for mortgaging 13846.238 acre land allotted in order to raise loans form financial institutions, even though it was not authorized to do so.”
Source – The Financial Express
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