This Article is From Mar 04, 2021

"Subverting Of Polls": Kerala Minister On Case Against Investment Fund Board

In the run-up to Assembly polls, the opposition - Congress-led United Democratic Front (UDF) and BJP - have accused the CPM-led state government of corruption

Kerala Finance Minister Thomas Isaac says the Masala Bonds are in line with RBI rules (File)


With just weeks to go for the Assembly polls, Kerala Finance Minister Thomas Isaac has hit out at the centre for "alleged attempts to subvert elections".

Mr Isaac's attack came hours after the Enforcement Directorate filed a case against the state's Kerala Infrastructure Investment Fund Board (KIIFB) for alleged violation of the Foreign Exchange Management Act (FEMA) while raising funds for infrastructure projects.

The central probe agency has summoned senior KIIFB officials, including the CEO. The KIIFB is headed by Chief Minister Pinarayi Vijayan, who is the Chairman. Mr Isaac is the Vice Chairman.

"This case for alleged violation of FEMA regulations is silly and happened right after Union Finance Minister Nirmala Sitharaman openly criticised the Board while in Kerala. They are using central agencies to subvert elections in Kerala and this is a serious issue," Mr Isaac told NDTV.

"We will go before the people and tell them what we have done, and the way we raised funds for development. This will be a major electoral issue. We have nothing to worry... the people of Kerala with us. Let them probe what is within their ambit - if there was any money laundering - but they cannot go into constitutional validity of the board," he added.

Kerala will vote on April 6.

The principal opposition - the Congress-led United Democratic Front (UDF) and the BJP - have both accused the CPM-led state government of corruption.

Ms Sitharaman, in Kerala to campaign for the party, addressed the BJP's 'Vijay Yatra' - a state-wide event - in Kochi on Sunday, and criticised the Left government on the KIIFB issue.

"The Kerala budget was presented and all of the money is given to the KIIFB. I don't know what budget they are making if all the money is given to KIIFB. What is this organisation?" she asked, according to news agency ANI.

The Congress says Masala Bonds floated by the KIIFB are a violation of the state's jurisdiction.

"We have been questioning the financial prudence and legality of issuing Masala Bonds starting from 2019. The Enforcement Directorate has issued notice to senior officials as well. Now the Left, as well as the Finance Minister, are arguing the centre is attacking, or trying to intervene in, the development strategy of the state. This is ridiculous," Mathew Kuzhalnadan, the KPCC General Secretary, alleged.

"The no-objection certificate by the RBI was not a consent for a go-ahead," he added.

Mr Isaac has maintained that the KIIFB's Masala Bonds, which were floated in 2019, were in accordance with RBI guidelines. "The centre never objected to the Masala Bonds (but) now is using its investigating agency to harass," he claimed.

Masala Bonds are those issued outside India but in rupees rather than the local currency.

With input from ANI