A raid by the Vigilance and Anti-Corruption Bureau (VACB) at the branches of Kerala State Financial Enterprises Limited (KSFE), an NBFC under the state government, has triggered a political controversy in Kerala.
Why was the raid conducted?
The VACB, which comes under the state home department, on Saturday raided 40 branches of KSFE after the internal intelligence wing of the anti-corruption agency allegedly detected anomalies in handling chitty deposits. It was found that branch managers were not transferring the chit fund deposits to nationalised banks or state treasury, which caused loss for the enterprises in terms of revenue from interest for deposit. Besides, several depositors were allowed to take part in auction of chit before their invested amount was credited with the account of the KSFE. Staff and managers were allegedly found indulging in benami operations and auctions of chits. Earlier this year, CAG audit had found that KSFE had accepted deposits from the public in excess of government guarantee. Also, gold loans had been sanctioned to private money lenders in violation of the basic objectives of the company. There have been allegations that the auction of chit was used for whitening of black money. 📣 Follow Express Explained on Telegram
Why is the controversy?
The VACB is under the Home Department, a portfolio held by Chief Minister Pinarayi Vijayan. KSFE, a state-owned non-banking financial firm, is under the Finance Department held by senior CPI(M) leader and Finance Minister Thomas Isaac. The raid by the state vigilance in a state PSU has irked Isaac at a time the CPI(M) as well as the party-led government has been alleging that the BJP government at the Centre has been using its investigating agencies as a political weapon against Kerala. Isaac has questioned the propriety of the raid at the KSFE, one of the profit-making PSUs in Kerala.
Why have CPI(M) leaders come out against the raid?
Although the VACB is under the Chief Minister, CPI(M) leaders have come out against the raid, which was done without taking the finance minister into confidence. When offices of a particular department are raided by the VACB, the minister handling the department is informed about the action. CPI(M) state secretary A Vijayaraghavan has stated that the party would examine the raid and whether it was with the consent of the Chief Minister. On the other hand, the Chief Minister cannot denounce the raid, as that would send a wrong message against the government’s stand against fighting corruption.
Does the Opposition gain from the controversy?
The raid has served as an ammo for opposition, the Congress and the BJP to expose the double standard of the CPI(M) towards investigating agencies. The CPI(M) has recently used the VACB to register cases and record the arrest of a few opposition leaders in corruption cases. The CPI(M) protest towards the raid at KSFE has given an opportunity to the Opposition to highlight that the government has bridled the VACB when it detected anomalies in a PSU under it.
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