Fresh allegations have emerged against the Kerala Financial Corporation (KFC) for a reckless investment in Anil Ambani’s Reliance Commercial Finance Limited (RCFL), which resulted in a staggering loss of £101 crore. Reports suggest the investment was made at a time when RCFL was already sinking into financial distress, raising serious concerns about the lack of due diligence and deliberation.
According to sources, KFC invested Rs60.8 crore on 26 April 2018, based on a decision made by its Liability Management Committee a week earlier, on 19 April. Including interest, the total owed amount has risen to Rs 109 crore, of which only Rs7.09 crore has been recovered, following RCFL’s liquidation in 2019. Shockingly, information about this dubious transaction was withheld for several years, with the company’s name conspicuously absent from KFC’s annual reports for 2018-19 and 2019-20. It was only disclosed in the 2020-21 annual report, seemingly to justify the partial recovery of Rs7.09 crore during liquidation.
Former Finance Minister and CPM leader T.M. Thomas Isaac defended the controversial investment, claiming it was necessary for KFC to qualify for issuing a Rs 250 crore bond. However, the response of the current Finance Minister, K.N. Balagopal, has sparked outrage, as he dismissed the matter by stating, “Profit and loss are part of business.”
#WATCH | Ernakulam, Kerala: Congress leader VD Satheesan says, "In 2018, Kerala Financial Corporation invested more than Rs 60 crores as debentures in the Anil Ambani-owned company. That company was liquidated in 2019… The government of Kerala lost more than Rs. 100 crore as… pic.twitter.com/HEx53VFmTX
— ANI (@ANI) January 3, 2025
The allegations do not stop there. Critics argue that the decision to invest in the failing RCFL may have been influenced by the prospect of hefty commissions. Questions have also been raised about whether the ruling government was complicit in the decision, as even the KFC Director Board was allegedly kept in the dark.
Leader of the Opposition and Congress leader, V.D. Satheesan, claimed that the Finance Ministry failed to respond to queries regarding the investment during the 11th Assembly session, fuelling suspicions of a cover-up.
Notably, both the CPM and Congress have consistently criticised industrialists such as Ambani and Adani, often accusing the BJP of fostering a “Modi-Ambani-Adani nexus.” This revelation, however, exposes what appears to be hypocrisy on their part, raising uncomfortable questions about the nexus between financial decisions and political motives.
The episode has reignited debate about the ethics of financial governance in Kerala, with undesirable tendencies of greed and mismanagement seemingly taking precedence over accountability and public welfare.
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