![[Masala Bond Case] "Nothing could have Happened at KIIFB Without Approval of Thomas Isaac": ED to Kerala HC](https://i0.wp.com/lawchakra.in/wp-content/uploads/2024/07/image-2024-07-17T215543.224.png?fit=820%2C461&ssl=1)
Today, On 17th June, The Enforcement Directorate (ED) informed the Kerala High Court that nothing at the Kerala Infrastructure Investment Fund Board (KIIFB) could have occurred without Thomas Isaac’s approval. The ED stated that those responsible for decision-making at KIIFB, including Isaac, are accountable for its actions.
The Enforcement Directorate (ED) informed the Kerala High Court on Wednesday that all activities at the Kerala Infrastructure Investment Board (KIIFB), particularly regarding the use of funds raised through masala bonds, would have had the endorsement of Dr. Thomas Isaac, the Communist Party of India (Marxist) leader and former State Finance Minister.
Masala bonds are rupee-denominated bonds issued outside India by Indian entities. The ED is investigating alleged irregularities and breaches of the Foreign Exchange Management Act of 1999 (FEMA) in the issuance and use of masala bonds by KIIFB.
Read Also: [Masala Bonds Case] “Why only Kerala being probed by ED?”: KIIFB to Kerala HC
Justice T.R. Ravi questioned the necessity of obtaining oral evidence on the actions of a corporation like KIIFB, which operates primarily through its documentation.
In response, Additional Solicitor General of India (ASG) ARL Sundaresan, representing the ED, argued,
“Individuals involved in decision-making at KIIFB, including Isaac, who was the ex-officio vice chairperson of KIIFB at the time, are accountable for the organization’s actions.”
Sundaresan stated,
“We can get information only from persons who were in the decision making process. We specifically say in our counter that being the vice chairman of the corporation, he was the chairman of the finance committee, and according to us, he is one who is aware of all the details with regard to the funds which were received and utilised. Without his approval and consent, things could not have happened and, therefore, he is a prime witness, a prime person from whom we would like to collect information.”
The ASG also argued that Isaac and KIIFB attempting to obstruct the investigation, which constitutes misuse of the Court’s judicial review powers under Article 226 of the Constitution of India.
He emphasized,
“The investigator should be allowed to carry out the investigation and file a negative report or a positive chargesheet. It cannot be interdicted by saying there is nothing against us, so don’t summon us. In which event, we are being halted from proceeding further which is not the object of judicial review under Article 226. A person who is summoned is not a person who is aggrieved to invoke the jurisdiction of this court under Article 226.”
KIIFB officials and Isaac initially filed petitions in 2022 challenging the Enforcement Directorate (ED) summons related to a central agency probe. In December 2023, the ED informed the High Court of its decision to withdraw the summons, though the Court clarified that the ED could continue its investigation.
However, in January this year, the ED issued new summons to Isaac and KIIFB officials, prompting another round of petitions challenging these summons. Isaac and the KIIFB officials argue that the summons do not specify which transactions are under investigation.
The case scheduled for a hearing on Friday, July 19th.
Representing the ED are Additional Solicitor General of India ARL Sundaresan and Central Government Counsel Jaishankar V Nair.
Isaac represented by Senior Advocate Jaideep Gupta and advocates N Raghuraj, Nandagopal S Kurup, Sayuja, Vivek Menon, and Rance R. Senior Advocate Arvind Datar and Kerala Advocate General Gopalakrishna Kurup K. represent KIIFB.
FOLLOW US FOR MORE LEGAL UPDATES ON YOUTUBE
