Satheesan alleges ₹101 crore loss in Kerala financial body’s investment in Reliance
CPM leader and former finance minister TM Thomas Isaac countered the VD Satheesan’s allegations and termed them “ridiculous”.
Leader of the opposition in the Kerala assembly VD Satheesan on Thursday alleged corruption of ₹101 crore in the investment made by the Kerala Financial Corporation (KFC), a state-owned undertaking, in the now-liquidated Reliance Commercial Finance Limited (RCFL) owned by Anil Ambani in 2018-19 when the latter was in bad fiscal health.
The Congress leader claimed that KFC, founded with the aim of supporting small and medium-scale enterprises with loans, invested ₹60.80 crore in RCFL in the form of non-convertible debentures in April 2018 on the recommendation of its Asset Liability Management Committee (ALCO). The investment, he underlined, was made at a time when most of Ambani’s firms were suffering losses and major financial strain.
“But following the investment, the name of Ambani’s firm was not disclosed in the KFC’s annual report in 2018-19. In the 2019-20 annual report also, it was not mentioned. It was in the 2020-21 annual report that the firm’s name was publicised. But RCFL was liquidated in 2019 itself. As part of the liquidation, KFC got back ₹7.09 crore. By investing ₹60.80 crore, the state should have got back ₹109 crore including interest. Thus, the state exchequer suffered a loss of ₹101 crore,” Satheesan alleged at a press conference in Thiruvananthapuram on Thursday.
“Serious crime and corruption were committed through investing money in a sinking firm instead of routing it in rightful small and medium-sector firms. The officials, with the knowledge of those in the government, invested the big sum of money in a soon-to-be liquidated firm in order to get commission. It is not an accidental mistake,” the LoP said.
Satheesan demanded that the government order a probe into the alleged corruption in the KFC’s investments in the liquidated firm. He said the records of the alleged investments must be put into the public domain by the government.
However, CPM leader and former finance minister TM Thomas Isaac countered the allegations and termed them “ridiculous”.
“KFC has a sound investment policy. The rule says the firm where money is invested must be a financial firm under the RBI. It must have AA rating. A short tender must be called and the institution which offers the highest interest must be shortlisted. All of these have been complied with,” Isaac said.
He also dismissed the allegation that KFC invested in a firm knowing full well that it was going to sink.
“The RCFL at the time had a AA+ credit rating. It had a net worth of ₹12,500 crore. It’s capital adequacy ratio was 17%. In 2017 and 2018, it recorded profits of ₹295 and ₹121 crore respectively. How can one predict that such a firm was going to get liquidated?” the former FM asked.
Isaac said the talks were still ongoing with the liquidated firm to recover the lost amount fully and that KFC had made complete efforts to reclaim its investments. HT tried get response from the RCFL but they were unavailable.
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