CWC member Ramesh Chennithala slams KIIFB over ‘poll-driven’ ad spending

Thiruvananthapuram: Congress Working Committee member and senior legislator Ramesh Chennithala on Tuesday intensified his criticism of the Kerala Infrastructure Investment Fund Board (KIIFB), alleging that crores of rupees were being diverted under the guise of advertisements to serve the government’s election campaign.

Responding to a clarification issued by the KIIFB CEO after his earlier press conference, Chennithala dismissed the explanation as “misleading” and disconnected from financial realities. KIIFB had claimed that advertisement campaigns contributed to improving its financial ratings.

Rejecting the argument, Chennithala said, “If advertisements determine ratings, then institutions spending the most on ads should get the highest ratings.”

While acknowledging that KIIFB bonds had secured respectable ratings, Chennithala asserted that brand visibility within Kerala had no bearing on securing Double A or Triple A ratings. Rating agencies, he pointed out, evaluate parameters such as cash flow, institutional financial strength and government guarantees and not regional publicity campaigns.

He termed the claim that Malayalam advertisements aimed at local audiences influenced global bond ratings as baseless. Chennithala alleged that advertisement expenditure spikes sharply during election years, ten to twelve times higher than in other years, indicating a political motive. “This is not about bond ratings but about ensuring the government’s continuation in power,” he said.

He further argued that neither the 1999 KIIFB Act nor its 2017 amendment authorises spending over Rs 100 crore on multimedia advertisement campaigns.

Though the Act permits KIIFB to raise loans at up to 1 per cent higher interest than other government borrowings, he said the agency has floated bonds at rates averaging 9.5 per cent, with even the controversial masala bonds carrying interest of nearly 9.8 per cent.

A substantial portion of the borrowed amount, he noted, had been repaid as interest.

Raising fresh questions, Chennithala pointed to large sums allegedly transferred to personal accounts under the “advertisement” head, despite recipients being described as PWD-approved contractors. He sought clarity on how such payments were processed. He also questioned KIIFB’s claim of institutional independence, noting that its CEO simultaneously serves as head of the Chief Minister’s political office.

A future UDF government, he warned, would order a forensic audit and initiate action, including criminal proceedings, if irregularities were established.