Land deals executed by the Kerala Infrastructure Investment Fund Board (KIIFB), worth Rs 12,252 crore, are under scrutiny because of suspected benami transactions and financial malpractices. The current UDF government is scrutinising the expert committee’s report regarding the large-scale purchase of land in Kannur. The committee suspects malpractice and recommends an investigation into whether benami transactions or other malpractices have taken place. The government is reportedly examining the report and is likely to order an investigation.
Reports suggest that 1,000 acres of land were bought in Kannur ostensibly for business development. However, the reason behind the purchase of such a large extent of land in Kannur, without making similar purchases in Vizhinjam, the state’s major port, is suspicious.
The land was reportedly purchased during 2016–17 without any clear statement in the Budget or Cabinet approval. It needs to be examined whether any legal provision permitted KIIFB (Kerala Infrastructure Investment Fund Board) to take independent decisions of this nature. It is alleged that Rs 12,252 crore was spent on the deal.
At that time, KIIFB’s assets were worth about Rs 16,000 crore, and according to reports, a major part of those assets had been spent on purchasing the land. The question arises as to whether there was clear planning and a proper study before such a huge sum was spent. Pinarayi Vijayan was the Chief Minister at the time.
The report says that the land’s value was comparatively low before the acquisition and that prices shot up when KIIFB purchased it, resulting in higher compensation being paid to landowners. This is another suspicious aspect of the deal.
The report also says that there was an attempt to raise loans by pledging the purchased land. However, bank authorities were unwilling to sanction loans after assessing the value of the land.
Now, the expert committee has recommended a Vigilance investigation to determine whether benami transactions or financial irregularities occurred.
The Kerala Infrastructure Investment Fund Board (KIIFB) is a financial institution launched by the Kerala Government on November 11, 1999, when E. K. Nayanar and T. Sivadasa Menon were the Chief Minister and Finance Minister, respectively, of the CPM-led Left Democratic Front (LDF) government.
It was launched to organise funds from outside the state Budget for large-scale infrastructure development in the state.
CPM leader T. M. Thomas Isaac was a Planning Board member during the tenure of that ministry. There were reports at the time that Thomas Isaac was the driving force behind KIIFB. Some even described it as his brainchild.
The aim of KIIFB was to finance major development programmes involving roads, bridges, schools, hospitals, water supply, electricity and the IT sector.
The money was raised through Masala Bonds from the international market. KIIFB is listed on the London and Singapore stock exchanges. Repayment was routed through fuel cess, a portion of the motor vehicle tax and Pravasi Chitty. An executive committee chaired by the Chief Minister, with the Finance Minister as vice-chairman, oversees KIIFB’s activities.
The projected administrative costs for the land acquisition are Rs 1,900 crore.
The committee found that the acquisition was carried out without concrete or specific projects. There are reports that former Finance Minister K. N. Balagopal had raised objections to KIIFB’s borrowings.
