The Left Democratic Front (LDF) Government in Kerala and the Centre are at odds over the Kannur International Airport Limited (KIAL). Tensions have flared up with the Corporate Affairs Ministry rejecting the Kerala Government’s stand that CAG audit is not necessary in the case of Kannur airport.

The State Government has been claiming that, though the Chief Minister is its chairman, KIAL is not a Government company. The Corporate Ministry has however rejected the State Government’s stand. KIAL is a Government company and an audit by the CAG is a must. The Ministry did not stop at that. If KIAL tries to prevent a CAG audit, action will be taken against KIAL officials, the Ministry has warned.

In its letter to KIAL Managing Director, the Corporate Ministry has made it clear that since KIAL has 63 per cent public sector shares, it is very much a government company. It may be mentioned that the State Government has 32.86 per cent shares in KIAL while State and Central public sector enterprises have 31.93 per cent shares in the company.

The Corporate Ministry’s firm stand has put the Vijayan Government in a tight spot. The LDF Government can no longer avoid an audit by the CAG, which it has been resisting.

The Corporate Ministry’s directive, in a way, vindicates the stand taken by the Leader of the Opposition in the State Assembly, Ramesh Chennithala. He has been accusing the Government of avoiding a CAG audit as ‘it has a lot to hide.’

The issue, no doubt, has given the Opposition parties a powerful weapon to belabour the LDF Government. The Opposition hopes that it is in a position to extract political mileage from the issue now that the Corporate Ministry has asked the Government to go in for a CAG audit.

KIAL MD V Tulasidas has said that KIAL had avoided a CAG audit on the basis of legal advice it had received. In the light of the Corporate Ministry’s directive, the Government will decide its future course of action after receiving legal advice.

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