Senior Congress leader Ramesh Chennithala. | Photo credit: KK Mustafah
Congress leader Ramesh Chennithala on Tuesday rejected Kerala Infrastructure Investment Fund Board (KIIFB) CEO’s claims regarding alleged government expenditure and financial irregularities linked to the election campaign. He described the CEO’s statement as a calculated attempt to divert attention from key issues and distort the facts in front of the public. The claim that advertising spend significantly affects KIIFB’s financial ratings is misleading and against established financial principles.
Mr. Chennithala explained that if advertising spending were truly a determining factor in credit ratings, institutions that invest heavily in advertising would automatically secure the highest ratings. While acknowledging that KIIFB’s bonds have received a favorable rating, he clarified that such rating cannot be attributed to the visibility of the brand in Kerala alone. Ratings such as Double-A or Triple-A are based on well-defined parameters, including cash flow stability, institutional financial strength, ability to repay, government support and other standard criteria used by rating agencies.
He further argued that KIIFB’s advertising campaigns — largely conducted in Malayalam and aimed at the Malayali population — had no logical connection with the bond rating. Alleging that the KIIFB misuses substantial public funds without proper legal authority for short-term political purposes to benefit the government, he pointed out that advertising expenditure is said to increase 10-12 times during election years compared to non-election years, reflecting political mobilization rather than financial necessity.
More than ₹100 crore
Referring to the KIIFB Act 1999 and its 2017 amendment, Mr Chennithala noted that there was no provision authorizing the board to spend more than ₹100 crore on multimedia advertising campaigns. By law, KIIFB is authorized to negotiate loans from other government sources with an additional interest margin of 1%. Taking advantage of this provision, KIIFB mobilized funds by issuing bonds to financial institutions at average interest rates of up to 9.5% for infrastructure development.
He cited records showing that funds borrowed at 7.75% interest by state institutions, including the Kerala State Electricity Board, were allegedly taken by KIIFB at higher rates and subsequently extended to other state entities at around 9%. He also noted that the masala bonds issued by KIIFB carried an interest rate of around 9.8%. Almost 40% of the total funds raised were reportedly repaid ahead of schedule after assessing potential legal risks, a fact he said was well known to the KIIFB CEO.
Responding to concerns about the transfer of crores of rupees to the bank accounts of individuals, Mr. Chennithala said that although the CEO claimed that the beneficiaries were approved as public works contractors, the payments were made to the account of the head of advertising. If the funds were legitimately channeled through the public works contractor, KIIFB should have made it clear. Instead, payments were directly transferred to contractors after work was completed, contradicting the CEO’s claim that there was no direct link with contractors.
If voted into power
Describing the financial losses, corruption and irregularities associated with KIIFB as far-reaching, Mr. Chennithala said that if the United Democratic Front (UDF) comes to power, a committee of financial experts, chartered accountants and vigilance specialists will be constituted to conduct a comprehensive review of all financial operations and project implementations so far. Detailed forensic audits would be conducted and if any irregularities were found, appropriate legal action – including criminal proceedings – would be initiated against the CEO and other officials. He added that if KIIFB is functioning as a hidden political funding mechanism, it is totally unacceptable.
Published – 17 Feb 2026 22:35 IST