OCCI UK says Chief Minister’s and LDF leader’s visit on May 17 aimed at cheating UK Malayalees

By A Staff Reporter

LONDON May 12: The Malayalee wing of the Overseas Congress Committee of India (UK) has alleged that the visit of Kerala Chief Minister Pinarayi Vijayan and Finance  Minister Thomas Isaac to Europe and London are aimed at cheating Malayalees in the UK and Europe.

In a press note sent to this website OCCI alleges that the LDF leaders are looking to cheat UK Malayalees of their money through the Kerala Infrastructure Investment Fund Board (KIIFB) bond launch and the KSFE Pravasi Chit launch on May 17, 2019 in London.

OCCI UK also alleged that the funds raised following the Kerala floods in August has still not been distributed and reached the deserving people and yet before that the LDF leaders have set out for this trip to Europe for fund collection.

Kerala Chief Minister Pinarayi Vijayan started his European trip on May 8, 2019. During this Europe and London trip he will be participating in various programmes  aimed at garnering financial gains to the state and also focusing on infrastructure and development.

He will be in London only for one day which is May 17 for the listing of the masala bond on the London Stock Exchange and then the launch of Pravasi Chit Fund in the  afternoon. The same evening he will fly to Paris.

Listing on the London Stock Exchange of masala bond from KIIFB

On May 17 the chief minister will attend the listing on the London Stock Exchange a masala bond from Kerala Infrastructure Investment Fund Board (KIIFB), the only state-government body from India to issue the rupee-denominated offshore bond. KIIFB plans to raise Rs 5,000 crore through masala bonds to fund large and critical infrastructure projects in Kerala.

What is Masala Bond

KIIFB’s masala bond was the brainchild of Kerala finance minister Thomas Isaac and KIIFB chief and former Securities and Exchange Board of India director K.M. Abraham. The board has raised ₹2,150 crore through masala bonds.

Masala bonds are bonds issued outside India but denominated in Indian Rupees, rather than the local currency. Masala is an Indian word and it means spices. The term was used by the International Finance Corporation (IFC) to evoke the culture and cuisine of India.

Unlike dollar bonds, where the borrower takes the currency risk, masala bond makes the investors bear the risk. The first Masala bond was issued by the World Bank- backed IFC in November 2014 when it raised 1,000 crore bond to fund infrastructure projects in India.

Later in August 2015 International Financial Cooperation for the first time issued green masala bonds and raised Rupees 3.15 Billion to be used for private sector investments that address climate change in India.

KSFE Pravasi Chit Fund Launch

On May 17, 2019 afternoon the KSFE Pravasi Chit fund will be launched at 2pm at The Montcalm Royal London House Hotel in Liverpool Street in London.

Pinarayi Vijayan has invited Jeremy Corbyn, the veteran Left wing leader of the UK opposition Labour Party, to launch the state’s offshore chit fund in Europe. The chit funds are the latest in a series of measures taken by Kerala government to attract funds, working the market for capital expenditure back home.

Vijayan launched the pilot phase of the chit fund scheme in June 2018 in the United Arab Emirates, a favourite destination of non- resident Malayalees, to raise ₹10,000 crore in two years.

The money is meant to finance their hallmark policy initiatives such as building wide roads and establishing better public schools, and hospitals, which is a priority as the state suffered one of its worst floods in 2018.

The state got 125,000 leads for the fund within a fortnight of the launch. This year, Isaac said, the state wants to raise ₹25,000 crore by expanding the scheme to other markets.

The scheme is primarily aimed at Kerala expatriates, who form almost 10% of the state’s 30 million population and send home more than ₹1 trillion every year. At 8-18% return offerings, the chits are also sweetened with life-term insurance cover, pension, and other benefits.

The 2018 Kerala flood, which ravaged the state and claimed 483 lives, was among the major disasters reported globally in the last year, including the California wildfire and the floods in Japan. The Post Disaster Needs Assessment (PDNA) report prepared by a UN team said Kerala would need Rs 31,000 crore for rebuilding.