Former Finance Minister and CPI(M) leader T.M. Thomas Isaac confirmed on Monday that he had received a summons from the Enforcement Directorate (ED) concerning the open financial market borrowings by the Kerala Infrastructure Investment Fund Board (KIFFB) under his watch in the previous Left Democratic Front (LDF) administration.
Dr. Isaac said he had three classes at the EMS Academy on Tuesday and would not heed the summons. “The rest the party will decide,” he said.
Alleged political game
According to the former Minister, the ED had sent the notice to an old address of his in Alappuzha and then leaked the matter to the media. “So they are playing a serious political game,” he said.
The ED and Income Tax had examined KIFFB for alleged money laundering and violation of foreign currency regulation norms. But they found nothing. The people had rejected ED’s recriminatory campaign and leaks of cherry-picked information to the right-wing media to discredit the previous administration. The people voted the LDF to power for the second straight tenure in the 2021 Assembly elections, he said.
Better schools, robust infrastructure, piped water, free Internet, power connectivity, modern hospitals, and well-paved roads resulted from outside budget borrowings. The voters realised how KIFFB had transformed the lives of ordinary people, he said.
The ED and IT department were stooges of their political masters in New Delhi. They were playing a political game instead of pursuing a proper investigation under the provisions of the law. They were here to help the Sangh Parivar politically. “We will counter their campaign politically,” he said.
Legal status of KIIFB
He dismissed the ED’s view that the State government had no legal standing to raise money in local currency from foreign investors. Both the government and private entities could issue these bonds, he said.
KIFFB is a body corporate brought into existence by an Act of the Kerala Assembly. It had legal founding. The Reserve Bank of India had deemed that State-backed body corporates could raise money from the open financial market. KIFFB had issued masala bonds before the RBI passed a rule, ostensibly under political pressure from the Centre, withdrawing the privilege to body corporates to muster money from the open financial market.
Hence, the amendment did not apply to KIFFB because it had no retrospective effect, he said. The National Highways Authority of India had issued masala bonds to finance road development. But, the ED had no case against the NHAI because it was a Central government entity, he added.