The subscription for the much-touted masala bonds issued by Kerala Infrastructure Investment Fund Board (KIIFB) has come in for sharp criticism with the Quebec Deposit and Investment Fund (CDPQ), connected with controversial SNC Lavalin getting a chunk of the bonds, according to Opposition leader Ramesh Chennithala.
SNC Lavalin has been in the midst of a row in the State as Chief Minister Pinarayi Vijayan is facing charges of having struck a deal with the firm when he was power minister during the regime of EK Nayanar in 1995 and causing huge loss to the exchequer. The Supreme Court is to take up the case in May. Pinarayi political future had been at stake over the issue.
Ramesh said it remained a mystery how deals were made with SNC Lavalin only when the Left was in power.
"The government had clarified that KIIFB had sold masala (Rupee-denominated overseas) bonds worth Rs 2,150 crore. The bonds were listed in Singapore and Canada. Most of the bonds were brought by CDPQ, a global investing agency that holds 20 per cent shares in SNC Lavalin. The government must clarify how this happened," he said on Saturday.
Chennithala found foul play in the government again striking a deal with a company that had shares in SNC Lavalin. It was for the Government to clarify in the matter, he added.
"The bonds were sold for a high interest of 9.8 per cent. Yet, CDPQ brought a lion's share of them. There is a mystery behind this. This is a tip of an iceberg of a big corruption or nepotism,” Chennithala asserted.
KIIFB says charges baseless
KIIFB has denied Chennithla’s allegation. In a statement by Chief Secretary KM Abraham, who is the CEO of board, said CDPQ was a public sector body of the Canadian government and connecting its many investments in SNC Lavalin or any other establishment to the masala bond deal of KIIFB would be illogical.
“CDPQ is a government body in Canada which was created in 1965 under an act of the national assembly of Quebec. It is a public sector body whose entire beneficial interest is held by the government of Canada.
“CDPQ is the second largest pension fund in Canada and has investments in 75 countries. CDPQ makes its investments under the Foreign Portfolio Investor (FPI) or Foreign Direct Investment (FDI) regulations approved by the Government of India.
“CDPQ has business transactions with SNC-Lavalin; there are other pension funds of Canada which also have investments in SNC-Lavalin.
“But SNC-Lavalin or none of the other institutions in which CDPQ has invested can have any ownership in CDPQ as it is a government body of Canada,” the statement said.
CDPQ had also purchased Rs 130 million worth of securities issued by the Government of India, it added.