The Enforcement Directorate (ED) has called upon Thomas Isaac, a senior leader from Kerala’s CPI(M), for questioning regarding a FEMA case related to alleged financial irregularities during his tenure as the state’s finance minister overseeing the Kerala Infrastructure Investment Fund Board (KIIFB).
At 71 years old, Thomas Isaac has been asked to appear at the ED office in Kochi on January 12. This summons comes after the ED had initially withdrawn its earlier summons to Isaac, a move revealed during proceedings in the Kerala High Court. Isaac and a KIIFB official had previously challenged the summons, arguing that the ED sought only personal information, prompting the ED to retract it. However, the HC allowed the agency to continue its investigation while dismissing the petitions.
The current summons to Isaac is based on the HC’s decision to permit the ED to proceed with its inquiry under the Foreign Exchange Management Act (FEMA). The investigation revolves around scrutinizing the utilization of ₹2,000 crore raised by KIIFB through masala bonds and its adherence to FEMA regulations.
KIIFB serves as the primary entity for financing major infrastructure ventures in Kerala and had garnered ₹2,150 crore in 2019 via its debut masala bond issuance. This initiative aimed to accumulate ₹50,000 crore to support crucial infrastructure projects in the state.
The ED’s suspicion of FEMA violations prompted the initiation of the probe. The agency is scrutinizing the end-use of the funds raised through masala bonds and evaluating KIIFB’s compliance with FEMA norms.
This development has cast a spotlight on Kerala’s financial landscape, particularly regarding infrastructure funding and compliance with regulatory frameworks. Thomas Isaac’s summoning indicates a significant step in the ongoing investigation, highlighting the ED’s efforts to ensure transparency and adherence to financial regulations within the state’s infrastructure financing mechanisms.
Sources By Agencies
