Leader of the Opposition Ramesh Chennithala on Monday sought to resurrect the ghost of SNC Lavalin that has haunted Chief Minister Pinarayi Vijayan politically since 1995.
At a meet-the-press programme here, Mr. Chennithala said the Pinarayi government had attempted yet again to reward the Canadian firm, which was still at the centre of an unresolved corruption scandal linked to a hydroelectric infrastructure augmentation contract struck when Mr. Vijayan was the Power Minister.
He said the tainted SNC Lavalin had appeared in Kerala again under the guise of its subsidiary company, CDPQ. The firm owned 20% stake in Lavalin and had the same individual as vice president.
Mr. Chennithala said, in what could be a case of insider trading, KIIFB officials had conferred with four CDPQ managers, including a director of SNC Lavalin, in the capital for four days between March 23 and 27. He said KIIFB officials possibly gave them information not available to the public regarding the issue of the bonds.
The CDPQ in turn purportedly agreed to purchase the issue for an exaggerated interest rate of 9.72% when KIIFB listed it at the London Stock Exchange. KIIFB hoped to raise ₹2,150 crore by selling the bond to the CDPQ.
However, the CDPQ stood to gain hugely out of the deal at the expense of the exchequer.
For one, the government had to pay the firm an annual interest of ₹209 crore for the next 25 years. Interest payable to the CDPQ alone amounted to ₹5,213 crore apart from the principal. He said various entities in India had issued masala bonds to raise money for infrastructure projects from the open market. However, none had issued bonds that guaranteed the buyer an extortionate and unheard rate of 9.72% as KIIFB had done thoughtlessly.