KIIFB approaches Kerala HC against ED probe into masala bonds

Kerala High Court

Kochi: The Kerala Infrastructure Investment Fund Board (KIIFB) on Friday approached the high court seeking cancellation of probe of the Enforcement Directorate into the foreign loan (masala bonds) availed by the Board.

The case registered under Foreign Exchange Management Act will not come under the jurisdiction of the ED. The Reserve Bank of India is responsible for checking violations of FEMA. The ED can only investigate the Prevention of Money Laundering Act, said KIIFB in the court.

The masala bonds of KIIFB had the prior approval of RBI. Yet ED officials have been troubling since March 2021 on the matter. It summoned KIIFB officials multiple times. Questioning has turned into harassment. The probe is politically motivated, it alleged in the plea.

Earlier, five Left front MLAs had challenged ED investigation into KIIFB in HC. The PIL also requested the establishment of a system to address disputes between union and the state government as well as their respective statutory agencies.

The PIL has contended that ED had been issuing summons to several officials of KIIFB to tarnish its goodwill which would be detrimental to the development of infrastructure in the state.

Former Kerala finance minister and CPM central committee member Thomas Issac was asked to appear before ED for interrogation regarding KIIFB. Issac also moved the Kerala High Court seeking to quash the summons. The court granted relief to the CPM leader and asked ED to explain why the personal details of Isaac were required to question him.

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