The Kerala Infrastructure Investment Fund Board, which is now under the Enforcement Directorate's scanner for Rs 250 crore deposit in Yes Bank, had earlier also courted controversy after it raised objections to a comprehensive audit by the Comptroller and Auditor General.
The KIIFB is a state government agency for funding infrastructure projects in Kerala. So far it has approved around 730 projects to the tune of nearly Rs. 40,000 crore.
The state government had refused a comprehensive audit by the CAG under section 20 (2) of CAG’s (Duties, Powers and Conditions of Service) Act citing that the parallel auditing system might affect prospective investments and thereby jeopardise the purpose of KIIFB. The state government and KIIFB were of the view that an audit under section 14 (1) by CAG was only required. But the CAG had not agreed to it.
Minister of State for Finance Anurag Thakur informed the Rajya Sabha on Wednesday that Rs 250 crore deposit of the KIIFB in Yes Bank was under the ED inquiry.
KIIFB chief executive officer K M Abraham justified their decision to invest in Yes Bank and said the investment was made in 2018 when the said bank had a good rating and the deposit was withdrawn when the rating came down. The KIIFB did not suffer any loss owing to the investment in Yes Bank, he claimed.
KIIFB's investment management committee took the decision to invest in Yes Bank and the decision was very well within KIIFB's investment policy that allows investments in public and private sector banks with a good rating, he said.