LSE invites Kerala CM amidst masala bonds row

Thiruvananthapuram: Amidst a row over the subscription of Canadian fund managers CDPQ, in which the controversial SNC-Lavalin holds a substantial stake, the masala bond of Kerala Infrastructure Investment Fund Board (KIIFB) would be listed on the London Stock Exchange next month.

Chief Minister Pinarayi Vijayan is likely to attend the market opening ceremony on May 17 when the bond begins trading on the LSE, the largest masala bond centre globally, if he gets central clearance. Masala bonds, issued outside the country, got its name as they are sold in Indan rupee rather than the local currency and the spectators rely on exchange rate fluctuations.

Though the LSE has 49 masala bonds listed, this is the first sub-sovereign entity as the state guarantees the return, which is 9.723 per cent in Indian rupee terms.

The state will utilise the funds for infrastructure development. While the government termed it as a unique achievement in infrastructure funding, the opposition sharply criticised going for high-cost funds when much cheaper options are available.

Opposition leader Ramesh Chennithala while speaking to reporters in Malappuram alleged "mystery" in Mr Vijayan’s silence over subscribers of his masala bond.

"Whose interest is it to sell KIIFB bonds to the blacklisted Lavalin?" he asked.