NEW DELHI: Congress on Monday alleged that government-run Gujarat State Petroleum Corporation (GSPC) owed over Rs 12,000 crore in loans to various banks, and accused the Narendra Modi-led BJP government of trying to prevent the company from being declared bankrupt.

Congress MP and spokesperson Jairam Ramesh alleged that a Rs 20,000 crore scam had been unearthed in GSPC 13 years after Modi, then the Gujarat CM had announced the discovery of a natural gas block in the Krishna-Godavari basin in 2005.

Ramesh cited two CAG reports which noted that GSPC took loans of Rs 20,000 core from 15 banks and gave contracts for drilling to “four-five companies”. “Money was spent but gas was not found and today GSPC is in a financial condition where it needs to be referred to the Insolvency and Bankruptcy Code, 2016,” he said.

“Last year in August, under pressure from PM Modi, ONGC was forced to buy the GSPC gas block and GSPC got a relief of about Rs 8,000 crore. It still has to pay Rs 12,000 crore to banks,” Ramesh added.

The Congress leader also cited an RBI circular of February 2, according to which if a company, on March 1, 2018, owed banks more than Rs 2,000 crore and was found to be defaulting, it should be declared bankrupt after 180 days.

Ramesh said for the first time in 70 years, the Centre had filed an affidavit in the Allahabad High Court against the RBI circular. Noting that the 180-day window for GSPC ended on Monday, Ramesh said all eyes were on State Bank of India — to which GSPC owes over Rs 1,200 crore — to see whether it would declare GSPC bankrupt or succumb to “government pressure”.

“Does State Bank of India have the courage to declare GSPC bankrupt?” he asked.

