'Harassment', says Thomas Isaac as ED serves second notice in KIIFB case

Former Kerala Finance Minister TM Thomas Isaac has been served a second notice by the Enforcement Directorate (ED) for interrogation into alleged financial irregularities in the Kerala Infrastructure Investment Fund Board (KIIFB).

Issac has been summoned to appear before ED officials in Ernakulam on August 11 with books of account and other documents specified in the notice, failing which he will be penalised with ₹10,000.

Also read: Kerala Masala Bonds case: Why ED needs to do solid homework before quizzing Thomas Isaac

“This is a clear case of harassment, I have yet not decided whether to appear or to challenge the proceedings in the competent court, and will take a decision in consultation with lawyers” Issac told The Federal. 

Documents required

The documents listed in the notice include: the details of all bank accounts operated by Issac and his family members in the past 10 years, details of all movable and immovable properties owned by him and his family members in India as well as abroad, copies of ITR filed over 10 years, and details of all foreign visits with the purpose and income acquired during these visits over the same period.

The ED has instructed Issac to produce details of all the companies for which he is the director, and the financial statements of these companies from the last 10 years.

Also Read: Enforcement Directorate raids up 26 times since 2014: Govt data

“I am not the director of any company in my personal capacity. I have been the director of a few companies KIIFB and CIAL (Cochin International Airport Ltd) in the capacity of a minister and now I don’t hold any such position,” Issac told The Federal.

‘Political reasons’

According to him, the ED has been targeting KIIFB for political reasons. If there is a violation of FEMA rules, ED has to book the RBI first, said Issac. “As far as the Government of Kerala is concerned, KIIFB has followed all the rules and regulations set by competent bodies like the RBI while issuing masala bonds (rupee-denominated bonds in foreign markets),” he added.

On March 22, 2021, the Union Finance Ministry, in response to an unstarred question, had said in the Lok Sabha that there was nothing illegal about KIIFB’s off-budget foreign borrowings.

Also read: ED Raj reigns supreme as Shinde-Fadnavis regime completes a month

“RBI had given a ‘no objection’ from the angle of FEMA 1999 for raising RDBs (rupee-denominated bonds),” stated the Union Finance Ministry then. However, the ED maintains the position that KIIFB has violated FEMA provisions by issuing masala bonds, said Isaac.