Kerala Opposition leader demands investigation against KFC for allegedly causing ₹100 crore loss to State exchequer
The Hindu
Opposition leader demands anti-corruption probe into Kerala Finance Corporation's ₹100 crore loss in RFCL investment.
Opposition leader V.D. Satheesan has demanded an anti-corruption investigation against the Kerala Finance Corporation (KFC), a public-sector undertaking, for allegedly causing a ₹100 crore loss to the State exchequer by “unlawfully and dubiously” investing in the now liquidated Reliance Commercial Finance Limited (RFCL) at a critical time when the Anil Ambani-owned non-banking financial firm was fiscally ailing.
At a press conference in Thiruvananthapuram on Thursday (January 2, 2025,) Mr. Satheesan said KFC, which the government had tasked with providing medium- and long-term credit to small- and medium-scale undertakings, had invested ₹60.8 crore as Non-Convertible Debentures (NCDs) in RFCL during the 2018-19 period.
He said KFC’s Asset Liability Management Committee (ALCO) had decided to invest public money in RFCL, ignoring cautionary reports that RFCL was in financial trouble. He alleged that the committee had kept the KFC’s director board in the dark about the investment decision.
Moreover, Mr. Satheesan said KFC had violated the law, which allowed it to invest only in the Reserve Bank or nationalised banks. He said the KFC “wilfully” obfuscated its investment in RFCL without mentioning the private firm’s name in its annual reports available in the public domain.
He said the Reserve Bank of India (RBI) liquidated RFCL in 2019. Since then, RFCL has not honoured the NCDs nor paid the KFC any interest. Mr. Satheesan accused the Left Democratic Front (LDF) government of walking the extra mile to conceal the illegal deal between KFC and RFCL.
The Finance Department pointedly refused to answer questions about the illicit arrangement posed by the Congress-led United Democratic Front (UDF) Opposition in the Assembly.
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