Thiruvananthapuram, Dec 1 Senior Congress leader and CWC member Ramesh Chennithala on Monday alleged that the Masala Bond issue is one of the biggest financial scams in Kerala’s history and claimed it directly benefited a Canadian firm with links to the controversial SNC-Lavalin case.
On Monday the news surfaced that the ED has served notices to Chief Minister Pinarayi Vijayan, former Finance Minister Thomas Isaac among others over alleged violations of the Foreign Exchange Management Act (FEMA) in the issuance and use of Masala Bonds by the Kerala Infrastructure Investment Fund Board (KIIFB).
Chennithala accused CM Vijayan and Isaac of favouring the Canadian pension fund CDPQ by issuing Masala Bonds at an excessively high interest rate of 9.72 per cent when similar Indian bonds were available internationally between 5.5 and 7.5, and World Bank rates were just around 2.5 per cent.
Chennithala argued that while CDPQ held a 20 per cent stake in SNC-Lavalin — the Canadian engineering and construction company involved in the Rs 375-crore case in which CM Vijayan was the seventh accused — the Masala Bond deal was structured to favour the Canadian firm through a private placement even before it was publicly listed on the London Stock Exchange.
“The bonds were secretly allotted before March 29, 2019, and the money had already reached KIIFB. Yet on April 1, the Chief Minister went to London only to formally announce the listing,” he said, alleging it was a political showcase masking a pre-arranged transaction.
He pointed out that other development loans, such as those from the ADB, were available at less than 4 per cent, and Kerala had previously secured funds for Kochi Metro at 1.35 and Water Metro at 1.55 per cent.
However, Masala Bonds worth Rs 2,150 crore were taken at 9.72 per cent, costing the state Rs 1,045 crore in interest alone, with a total repayment of Rs 3,195 crore.
“The only true beneficiary was CDPQ,” he said.
Chennithala also dismissed the recent Enforcement Directorate notice as an election-season gimmick, claiming it was intended to dispel perceptions of a "hidden alliance" between the BJP and CPI(M).
“Like in the gold smuggling case this, too, will fade because of the warm relationship between Narendra Modi and Pinarayi Vijayan,” he alleged.
He further added that even the Comptroller and Auditor General (CAG) had recorded rule violations in the issuance of the bonds.
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