Kerala HC refuses to stay ED summons to KIIFB

KIIFB had argued that the ED summons was issued with mala fide intention and to obstruct the functioning of the statutory body, which is funding several infrastructure development projects in Kerala

Thiruvanathapuram:The Kerala High Court on Tuesday refused to stay the Enforcement Directorate (ED) summons issued to Kerala Infrastructure Investment Fund Board (KIIFB), the state government agency for mobilising funds for infrastructure projects, on charges of alleged Foreign Exchange Management Act (FEMA) violations.

Objecting to the KIIFB demand challenging the ED summons saying that the agency had no jurisdiction to look into the alleged FEMA violations, the ED sought more time to furnish a detailed reply, and the court posted the petition to September 2.

The ED had earlier registered a case against KIIFB and notices had been served to its officials and former finance minister Thomas Isaac, who had been the ex-officio vice-chairman of the state government body. The case is related to alleged FEMA violations in connection with KIIFB raising Rs 2,150 crore masala bonds listed on the London Stock Exchange. The ED has stated that, prima facie, there are FEMA violations.

Last week, KIIFB had approached the high court, challenging the summons, and had argued that the Reserve Bank of India (RBI) is the only government agency to look into FEMA violations. The petition was moved by KIIFB CEO K M Abraham and joint fund manager Ani Jula Thomas.