Thiruvananthapuram: The State government has ordered a probe into the alleged financial irregularities in the Kerala Transport Development Finance Corporation (KTDFC), the major lender to the debt-ridden Kerala State Road Transport Corporation (KSRTC). Charges of violation of procedures in recruitments and irregularities in sanction of loans will be probed by the Financial Inspection Wing.
The Vigilance has also initiated a simultaneous inquiry into the complaints of misuse of funds and corruption in the KTDFC.
It was alleged that the financial firm had flouted guidelines while sanctioning loans to the KSRTC and charged higher rates of interest, violating the relevant loan agreements. There was a huge drop in the number of borrowers due to the rampant corruption at the highest level, complaints showed.
The probe will look into the allegation that at least seven retired officials continued at the helm of affairs at the Corporation, drawing significantly higher salaries than their counterparts. Petitions also pointed out the involvement of the managing director in the gross irregularities in the appointment of staff.
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KTDFC, a non-banking financial company fully owned by the government of Kerala, came into existence on February 27, 1991, under the Companies Act 1956. It was established with a primary objective of providing financial support to infrastructure development in the transport sector. In addition to financing road transport vehicles, it has been providing loans to procure machineries and modernize workshops. The company accepts deposits from the public and institutions that are guaranteed by the State government.
The comptroller and auditor general (CAG) audit had found that the net profit of the KTDFC surged on the back of the huge interest rates it charged on the borrowings made by the KSRTC.
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As the KTDFC started making profits by charging exorbitant interests on loans availed by the KSRTC, the latter was pushed into a permanent debt trap, the petitioners alleged.
The transport utility has so far availed loans amounting to Rs 4,264.04 crore from the KTDFC, which involves an interest component of 7.75-16. 25 percent. The KSRTC has repaid a principal amount of Rs 3,637.62 crore, and Rs 1.120.54 crore in interest. However, the financial firm claims that the KSRTC still owes it Rs 626 crore.
The KTDFC is yet to submit the final report on the construction of commercial complexes on BOT mode at Angamaly (estimated at Rs 7.59 crore), Thiruvananthapuram (Rs 75.98 crore), Kozhikode (Rs 68 crore) and Thiruvalla (47.98 crore).
As per the agreement, the KSRTC is entitled to 50 per cent of the revenue generated at these bus terminal complexes through rent and other means, every month. However, it does not receive even the operational profits from the terminal in Thiruvananthapuram, whereas the move to lease the commercial space of the bus terminal in Kozhikode is caught up in a legal imbroglio.