Thomas Isaac, a senior member of the CPI(M), has received a notice from the Enforcement Directorate (ED) requesting that he appear before it as part of an investigation into alleged irregularities in the financial dealings of the Kerala Infrastructure Investment Fund Board (KIIFB) while he served as finance minister in the previous LDF administration, according to official sources on Monday.
The ED is looking into possible Foreign Exchange Management Act violations by KIIFB (FEMA). An ED officer claims that the use of “masala” bonds, which are rupee-denominated bonds issued outside of India by Indian firms, is a breach of FEMA.
As per the sources, “Enforcement Directorate has served a notice to the former Kerala Finance Minister Thomas Isaac to appear before it on Tuesday. The notice was served to gather information on financial transactions regarding the Kerala Infrastructure Investment fund board.”
Nirmala Sitharaman, the union finance minister, criticised the KIIFB’s operations while it was running for state assembly last year, claiming that the Comptroller and Auditor General (CAG) had criticised the organization’s financial dealings. Additionally, she has referred to the KIIFB’s operations as “questionable.”
In 2019, KIIFB raised Rs 2,150 crore through its first masala bond issue as part of its plan to mobilise Rs 50,000 crore to finance large and critical infrastructure projects in the southern state. As the primary agency of the state government for financing large and critical infrastructure projects, KIIFB is the primary source of funding for these projects in the state.
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