Leader of the Opposition V.D. Satheesan has objected to an Enforcement Directorate (ED) inquiry into the issuance of masala bonds by the Kerala Infrastructure Investment Fund Board (KIIFB).
Mr. Satheesan said outside budgetary borrowings via a special purpose vehicle did not come under the ambit of the Prevention of Money Laundering Act (PMLA). The ED appeared to have overstepped its authority. Its notice to former Finance Minister T.M. Thomas Isaac was legally irrelevant.
Nevertheless, the United Democratic Front (UDF) stance on the KIIFB remained unchanged. The CAG's report vindicated the UDF's position that the KIIFB lacked a constitutional guarantee. Moreover, the public exchequer would ultimately have to bear the burden of the enormous debts incurred by the KIIFB.