Masala bonds of KIIFB: ED notice to former Kerala finance minister TM Thomas Isaac


Thomas Issac | Photo: Mathrubhumi

Thiruvananthapuram: The Enforcement Directorate (ED) has served notice to senior CPM leader and former minister Dr TM Thomas Isaac seeking his appearance before it in connection with its probe into alleged violations of rules in the financial dealings of Kerala Infrastructure Investment Fund Board (KIIFB) when he was the finance minister in the previous LDF government, official sources said on Sunday.

Sources said Isaac has been directed to appear before the probe team on Tuesday. The notice was issued by ED deputy director Prashant Kumar.

Isaac said he has not received any such notices from the ED.

"Even if I get something like it, I am not going to appear because I have more important things to do. They (ED) will have to arrest me", he told PTI.

It is learnt that the probe of ED is on the 'masala bond' issued by the financing agency. Masala bonds are issued outside India but denominated in Indian Rupees. It may be noted that the borrowings of the KIIFB were approved by the RBI earlier.

During the campaign for the state assembly elections last year, Union Finance Minister Nirmala Sitharaman had criticised the functioning of KIIFB, alleging that the Comptroller and Auditor General (CAG) had criticised its financial dealings.

She had also termed as "questionable" the operation of KIIFB. Sitharaman had also questioned the role of the KIIFB in the making of the Kerala budget.

"I don't know what budget making is this when all the money is given to one KIIFB. What is this organisation? We also make a budget for the Union government. We don't give all money to one particular agency and say, 'We'll see'," she had said during her party's public meeting in Kochi last year.

CAG had flagged the KIIFB borrowings and argued that such fundings must be added to the kitty of the permitted borrowing of the state government. Following this, the state and union finance ministries have been deliberating on the matter.

(With agency inputs)

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