Kerala's Masala Bond Mystery: Why a 9.7% Interest Rate Raises Corruption Questions

On the Enforcement Directorate (ED) notices to Chief Minister Pinarayi Vijayan and former Finance Minister Thomas Isaac, Satheesan termed the move "politically timed to intimidate" the CPI-M ahead of local body polls.

He said the Opposition had long flagged the "mystery-laden transaction", accusing the government of borrowing Rs 2,150 crore from international markets at a steep 9.723 per cent interest rate, resulting in a total repayment of Rs 3,195 crore in just five years—an interest burden of Rs 1,045 crore.

"This is not normal. Nearly half the principal was lost to interest. Instead of using the state’s sovereign guarantee, which could have secured funding at barely 1.5 per cent interest, the government opted for exorbitant rates," he said.

Satheesan alleged that the deal violated Article 293(1) of the Constitution and involved CDPQ, a firm linked to SNC-Lavalin.

He claimed the much-publicised London Stock Exchange ‘bell-ringing ceremony’—where Chief Minister Pinarayi Vijayan was projected as the first CM to ring the bell —was a "mere PR drama".

"He rang the bell not as Chief Minister, but as KIIFB Chairman. Such ceremonies are routine for any issuer. There is corruption behind this publicity stunt," he said.

Criticising the timing of the ED notice, he said similar tactics were used during the Karuvannur Bank case before the Thrissur parliamentary polls.

"Central agencies, unlike in other states, won’t take investigations to their logical end in Kerala. They only serve notices to create fear," he alleged.

Calling it a "serious case, not one to be laughed off", Satheesan accused Isaac of distancing himself from responsibility by claiming the decision was the KIIFB’s.

"Public money raised through taxes and cess was used to pay usurious interest. The state exchequer suffered severe losses," he said, adding that the people of Kerala "should not be mocked by shifting narratives".

- IANS