Notice Issued To Kerala Chief Minister 'Fraud': Congress On Masala Bond Case

The Congress in Kerala on Tuesday said it does not trust the show-cause notice issued by the Enforcement Directorate to Chief Minister Pinarayi Vijayan in the KIIFB Masala Bond case, calling the central agency's move "fraudulent".

The masala bond issued through the Kerala Infrastructure Investment Fund Board (KIIFB) involved gross corruption and must be investigated sooner or later, senior party leader Ramesh Chennithala told reporters here.

He said the Congress would go to any extent to bring out the truth and expose corruption in the matter.

Accusing both the BJP and the CPI(M) of misusing the ED, Chennithala claimed the latest show cause notice was part of the "undercurrents" between the two parties.

"The ED will send a notice during election time. After the election, there won't be any follow-up. This is a tactic by the BJP to help the CPI(M)," he alleged.

The former home minister further alleged that the move was an attempt to "protect Chief Minister Vijayan and his government, which had become notorious for anti-people policies." He also claimed that a Canadian company - identified as a major investor in the KIIFB masala bond - had close links with SNC-Lavalin.

"The masala bond was issued to help the Lavalin company," Chennithala alleged.

His remarks assume significance as Chief Minister Vijayan had earlier faced allegations of corruption in awarding a contract to Canadian firm SNC-Lavalin, a decision that reportedly caused a loss to the state exchequer when he served as power minister in 1996.

Chennithala said he had raised these allegations years ago while serving as Leader of the Opposition, and asserted that all of them "have now proved to be true." "We don't trust the ED's show cause notice. It is fraudulent," he added.

The ED has issued a show cause notice to Kerala Chief Minister Vijayan, former finance minister T M Thomas Isaac and the CM's Chief Principal Secretary K M Abraham in the KIIFB masala bond case.

The notice, which does not require personal appearance, was issued about 10-12 days ago under the provisions of the Foreign Exchange Management Act (FEMA).

ED sources said a show-cause notice is issued after the completion of a FEMA investigation, and the quantified contravention in it is similar to a penalty.

The probe relates to the end-use of Rs 2,000 crore raised by KIIFB through masala bonds and its compliance with FEMA norms.

KIIFB is the primary agency of the state government for financing large and critical infrastructure projects. It raised Rs 2,150 crore in 2019 through its debut masala bond issue as part of its plan to mobilise Rs 50,000 crore for major infrastructure development in the state.

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