Leaders spar over probe into KIFB deals
TRIVANDRUM: The investigation launched by the federal agency investigating financial crimes into Kerala’s external borrowing has kicked up a row ahead of April 6 state elections.
“A conspiracy hatched under the federal finance minister ( Nirmala Sitaraman) is being revealed now,” Dr TM Thomas Isaac, the state’s finance minister, said on Wednesday.
“If the idea is to continue to intimidate the state government, we would give it back in kind. We’ll organise people and resist the atempt to sabotage the state’s growth.” The Enforcement Directorate (ED) has summoned top officials of the Kerala Infrastructure Investment Board (KIFB) for violations while raising funds abroad.
The federal auditors had recently found that the KIIFB sold bonds of Rs 21.5 billion abroad violating the Foreign Exchange Management Act (FEMA).
Kerala constituted the KIIFB in 1999 to raise funds for infrastructure development and the present government started large-scale extra-budgetary borrowings using it. Both the Congress party and Prime Minister Narendra Modi’s Bharatiya Janata Party have been atacking the state government over the heavy borrowings at a high cost while the officials say there was nothing wrong in borrowing heavilyforinfrastructureinvestmentspurringgrowth.
On Sunday, Sitaraman, while addressing a public meeting in the port city of Kochi, criticised this saying, “all the money is given to one KIIFB” and warned that Kerala was going into a debt trap.
On Tuesday, former Prime Minister Dr Manmohan Singh echoed her saying Kerala’s “excessive borrowings would create an intolerable burden on future budgets.” Isaac alleged that the ED move was a violation of the code of conduct issued by the election authorities.
He said there were clear guidelines for borrowing under FEMA and any ‘body corporate’ can borrow from abroad with the permission of the Reserve Bank of India (RBI).
KIIFB had applied to the RBI through banks and received the mandatory permission, he claimed.
“The ED is doing this with political intentions as the Assembly elections are around the corner,” he said. “They are cooking up false stories without even a preliminary understanding of how KIIFB is raising its funds.”
He revealed that the agency had asked KIIFB’S chief executive officer Dr KM Abraham and deputy manager Vikramjitsingh to appear before the investigators on March 8. He alleged they issued the notice to top executives at the instance of Sitaraman ater junior officials appeared before them on Feb.17 and clarified its position. Congress leader Dr Mathew Kuzhalnadan alleged that Isaac was lying and he had no mandatory approvals to go for overseas borrowing but only a no-objection certificate from the RBI.