Won’t appear before ED in FEMA case, says former Kerala FM

ED has been probing whether there were FEMA violations by Kerala Infrastructure Investment Fund Board in the end use of over ₹2000 crore it raised through rupee-denominated or masala bonds

Senior CPI(M) leader and former Kerala finance minister TM Thomas Isaac said on Tuesday that the repeated summons from the Enforcement Directorate (ED) to him as part of its probe into alleged Foreign Exchange Management Act (FEMA) violation is “pure harassment”, underlining that he will not appear before the agency.

TM Thomas Isaac, who was the finance minister between 2016 and 2021 in the first Pinarayi Vijayan government, said that he wrote a letter to the ED explaining how the agency’s summons was against the essence of what the high court had said in the matter. (HT Archives)

Isaac, who was the finance minister between 2016 and 2021 in the first Pinarayi Vijayan government, said that he wrote a letter to the ED explaining how the agency’s summons was against the essence of what the high court had said in the matter.

“How can they (ED) find something now that they have been investigating for one and a half years and couldn’t find? That’s pure harassment. It is meant to tarnish us. The summons of the ED is against the essence of what the court said. I have told (the agency in the letter) that they must withdraw from sending such summons. If they won’t withdraw, I will approach the court again,” Isaac told reporters on Tuesday.

Isaac had skipped the ED’s questioning on Monday citing personal reasons.

The ED has been investigating whether there were FEMA violations by the Kerala Infrastructure Investment Fund Board (KIIFB) in the end use of the over ₹2000 crore it raised through the issue of rupee-denominated bonds or masala bonds. The agency was recently allowed by the Kerala high court to continue its probe into the case.

The masala bonds were issued in 2019 when Isaac was the finance minister to raise funds for large and critical infrastructure projects under KIIFB, the principal funding arm of the state government.

The CPM leader said that he could appear before the ED if the agency can point out the legal violation under FEMA committed by KIIFB.

“I will appear and explain if they can tell me what is the violation. They cannot question me to find out the violation. The (high) court itself has said that it’s a roving expedition. I have given a warning to the ED to stop what they are doing. I will go to court to protect my dignity,” Isaac said.

He added that KIIFB officials have already shown all the records and data to the ED and that he as an ex-officio vice-chairman of the KIIFB director board has nothing more to add.