Kerala High Court grants relief to Thomas Isaac in masala bond case probe

While examining documents presented by the ED, the court noted that Isaac would need to address certain matters.

The court scheduled a detailed hearing for 22 May on the pleas filed by Isaac and the Kerala Infrastructure Investment Fund Board (KIIFB) in connection with the ED investigation into the case.

Previously, Isaac’s plea regarding ED’s summons for 22 April was postponed by the court.

However, as Isaac received fresh summons, he approached the court again seeking relief.

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The case

The ED issued summons to the senior Kerala CPI(M) leader for questioning in a Foreign Exchange Management Act (FEMA) case linked to the probe into alleged violations in the financial dealings of KIIFB during his tenure as the finance minister in the previous LDF government.

Earlier, the 71-year-old politician was asked to depose at the agency office in Kochi on multiple occasions, but Isaac challenged it in the high court.

The Central agency informed the Kerala High Court in December last year that it had withdrawn the summons issued to Isaac.

The submissions were made during the hearing of a plea by Isaac and a KIIFB official alleging that only personal information was sought through the summons by the 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.

Fresh summons to Isaac were issued in light of the HC allowing the agency to go ahead with the investigation, under the provisions of the FEMA, into the end use of ₹2,000 crore raised by KIIFB through masala bonds and its compliance with the FEMA norms.

KIIFB is the primary agency of the state government for financing large and critical infrastructure projects and had raised ₹2,150 crore in 2019 through its debut masala bond issue as part of its plan to mobilise ₹50,000 crore to fund large and critical infrastructure projects in the southern state.

The ED suspects contravention of FEMA here and hence initiated a probe.

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