ED summons former Kerala finance minister Thomas Isaac in KIIFB masala bonds case

ED summons Kerala CPI(M) leader Thomas Isaac for FEMA case linked to alleged financial violations in KIIFB during his tenure.

The Enforcement Directorate has summoned senior Kerala CPI(M) leader Thomas Isaac for questioning in a FEMA case linked to probe into the alleged violations in the financial dealings of KIIFB during his tenure as the finance minister in the previous LDF government, official sources said Sunday.

The 71-year-old politician has been asked to depose at the agency office in Kochi on January 12, they said.

The central agency in December had informed the Kerala High Court that it has withdrawn the summons issued to Isaac. The submissions were made during hearing of a plea by Isaac and a KIIFB official alleging that only personal information was sought through the summons by ED and seeking quashing of the same.

In view of the agency withdrawing the summons, the HC disposed of the petitions but at the same time, the court also said the ED was free to continue with its investigation in the matter. ED sources said the fresh summons to Isaac has been issued in light of the HC allowing the agency to go ahead with the investigation, under the provisions of the Foreign Exchange Management Act (FEMA), into the end use of Rs 2,000 crore raised by KIIFB through masala bonds and its compliance with the FEMA norms.

Kerala Infrastructure Investment Fund Board (KIIFB) is the primary agency of the state government for financing large and critical infrastructure projects and had raised Rs 2,150 crore in 2019 through its debut masala bond issue as part of its plan to mobilise Rs 50,000 crore to fund large and critical infrastructure projects in the southern state. The ED suspects contravention of the FEMA here and hence initiated a probe.