KOCHI: The enforcement directorate (ED) on Tuesday submitted before the Kerala High Court that it apprehended the misutilisation of the proceeds raised from the masala bond by the Kerala Infrastructure Investment Fund Board (KIIFB) and therefore it is imperative to conduct a detailed probe into it.
The ED filed an additional affidavit in response to a petition filed by former finance minister T M Thomas Isaac and KIIFB CEO K M Abraham seeking to quash the summons issued by the agency against them on charges of Foreign Exchange Management Act (FEMA) violations in the issuance of masala bonds.
In the additional affidavit, the ED submitted that evidence was gathered, indicating that a part of the External Commercial Borrowings (ECB) proceeds was utilised towards the transactions for ‘restricted end-uses’ under the Foreign Exchange Management (Borrowing and Lending) Regulations 2018 and negative end uses under the RBI Master directions.
Then the counsel for KIIFB submitted that RBI has not so far filed any response in the case as the court has suo motu impleaded RBI and issued notice to it. But no counsel was present in the court representing RBI. The counsel further pointed out that in the additional affidavit, the questions posed by the court regarding the inquiry into the masala bonds have not so far been answered by the ED.
The court pointed out that the interim order will expire only after December 9. The court had ordered ED to keep on hold for two months sending further summons to Isaac. The court will hear the case on December 7.