Legal tussle likely over KIAL auditing


Centre insists the company must be open for a scrutiny by CAG

The Union Ministry of Corporate Affairs’ insistence that Kannur International Airport Limited (KIAL) should be open for an audit of the Comptroller and Auditor General (CAG) has set the stage for a protracted legal battle between the Central and the State governments.

The Corporate Affairs Ministry has rejected the State government’s argument that KIAL is a private company and does not warrant a CAG audit. Though the decision is deemed to be a setback for the State government, it is unlikely to budge from its stated position and rescind it under duress.

The Union Ministry’s insistence is the outcome of a series of arguments between the Central and State governments in this regard.

Last year, KIAL had written to the Centre reiterating that it was not a public limited company since neither the Central nor State governments held majority share in the company.

Centre’s clarification

But the Centre has clarified that the stakes held by public sector undertakings in KIAL should be treated as government shares and has now threatened to launch prosecution proceedings against the company.

Government sources told The Hindu that the State had no confusion or dithering on the issue and it arrived at a conclusion to disallow CAG audit after due legal consultations. The present move is unlikely to prompt the State to alter the stance that KIAL is a private company and would not cave in to pressure, the sources said.

On receiving an official communication from the Union Corporate Affairs Ministry, the State will yet again clarify and reiterate its stance and this may again trigger a string of missives that would lead to a protracted legal tussle, the sources said.

The Opposition United Democratic Front has used it as a tool to hit out at the State government and the Left Democratic Front. But the State government may dub it as politically motivated moves to decry its achievements in making the airport functional and also undermine its other development initiatives, the sources said.

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Printable version | Dec 12, 2019 2:09:19 PM |

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