Chennithala says KIIFB masala bonds were bought by SNC-Lavalin affiliate

Kochi: Senior Congress leader Ramesh Chennithala Saturday alleged irregularities in issuance of masala bonds by state-owned KIIFB to an overseas pension fund allegedly having link with SNC-Lavalin, a controversial foreign company.

Talking to reporters here, the Leader of Opposition in the Assembly urged the state government to reveal the details of issuance of masala bonds of Kerala Infrastructure Investment Fund Board (KIIFB), raising Rs 2,150 crore.

Rupee denominated overseas bonds are popularly known as masala bonds.

He sought to know who took interest in issuing the bonds to the pension fund allegedly connected with the Canada-based controversial engineering and construction group.

"There is a mystery in it. This is a tip of an iceberg of a big corruption or nepotism," Chennithala claimed and also named the companies.

He said that transactions related to SNC-Lavalin increased whenever the Left Democratic Front came to power, pointing out that the company was involved in a corruption case in Kerala.

Chief Minister Pinarayi Vijayan was discharged of corruption charges in the case by the Kerala High Court. The CBI’s appeal will come up for hearing before the Supreme Court this month.

The Congress leader levelled charges of corruption against the ruling CPI(M)-led LDF government in the state in the midst of campaigning for the the Lok Sabha polls to be held on April 23.

Chennithala also sought to know the role of Chief Minister Pinarayi Vijayan and state Finance Minister T M Thomas Issac in the issuance of the bonds and said that he would reveal more details after getting their views on the matter.

The government has not reacted to the allegations yet.

KIIFB, a state government agency, had raised Rs 2,150 crore through its debut masala bond issue.

This was not only the first-ever offshore capital market issuance from a state-level entity from India, but also the largest dual currency issue by a sub-sovereign backed entity from the entire emerging markets and Asia, the KIIF had said.

The transaction was priced on March 26, 2019 and saw strong participation from a wide spectrum of investors which included asset managers, insurance companies, pension funds, banks as well as private wealth managers, it had said in a statement.

The masala bond market till date had seen issuance only from large Indian corporates and public institutions like NHAI and NTPC which are all rated AAA in the domestic market.

(With inputs from PTI)