Thomas Isaac. (Videograb)
Thomas Isaac. (Videograb)

Kerala minister says notices to investment fund board 'cheap poll gimmick'

Thomas Issac dismissed the ED charge that ‘masala bonds’ violated FEMA, saying there were set guidelines for external borrowing and KIIFB received the permission of the Reserve Bank of India.
By HT Correspondent, Hindustan Times, Thiruvananthapuram
PUBLISHED ON MAR 03, 2021 05:56 PM IST

The Kerala government on Wednesday termed the Enforcement Directorate cases against the Kerala Infrastructure Investment Fund Board (KIIFB) for alleged violation of Foreign Exchange Management Act as a “cheap poll-time gimmick” to scuttle the state’s development.

The ED had served notices to KIIFB CEO KM Abraham, former state additional chief secretary, and officials of the Axis Bank (banking partner) to appear for interrogation next week in connection with external borrowing through ‘masala bonds’.

“It is a cheap poll-time gimmick. The ED was cooking up stories without even understanding the KIIFB. Union finance minister Nirmala Sitharaman was using central agencies to target the state,” said state finance minister Thomas Issac.

Last week, addressing an election rally in Ernakulam, the union minister had questioned the role of KIIFB and its budgetary provisions.

Issac dismissed the ED charge that ‘masala bonds’ violated FEMA, saying there were set guidelines for external borrowing and KIIFB received the permission of the Reserve Bank of India.

Masala bonds are specialised debt instruments issued outside the country in Indian denomination rather than local currency. In 2019, chief minister Pinarayi Vijayan had attended the listing event at the London Stock Exchange.

“The ED’s move is a violation of poll code. The union minister also violated the poll code and it will be resisted with the support of the people,” he said. He also alleged that an ED official, who is the son of a senior BJP leader, was entrusted with the case to go after the state during election time.

BJP state president K Surendran lauded the ED’s move.

“The state’s debt had risen manifold in the last five years. In the name of KIIFB Issac and others were literally looting the state. Let there be some accountability,” he said. In the last report the Comptroller and Auditor General had also recommended a probe against the KIIFB constitution and its funding mechanism. The ED is also likely to question Issac.

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