Special Correspondent Kochi
The Kerala Infrastructure Investment Fund Board (KIIFB) has challenged the summons issued by the Enforcement Directorate (ED) and sought to restrain the investigation agency from taking any steps against it.
The petitioners apprehended that the present investigation initiated by the ED into the affairs of KIIFB was “part of an organised smear campaign, perpetuated by vested political interests, to discredit the State government machinery.”
Besides KIIFB, its chief executive officer K.M. Abraham and joint fund manager Ani Jula Thomas have approached the High Court against the agency.
The details of the summons issued to the petitioners were published in the press even before it was served to the petitioners. The action of the ED in informing the press about the summons even before serving them to the petitioners was illegal, they said.
The petitioners said the present investigation was related to the issue of the masala bonds by KIIFB. They contended that the impugned summons issued and the investigation launched by the agency were arbitrary and illegal and without jurisdiction.
The Reserve Bank of India had issued a no-objection letter for the issuance of masala bonds under the Foreign Exchange Management Act (FEMA). The RBI had also issued a loan registration number to KIIFB. The Supreme Court, while interpreting the provisions of the Foreign Exchange Regulation Act (FERA), 1973 (now FEMA) had held that the RBI alone could decide on issuing permission under the FEMA.
It was not open for the ED to question the legality of issuance of masala bonds by KIIFB, especially when the RBI had granted permission, said B.G. Harindranath and Amith Krishnan, counsels for the petitioners.
Though summons were issued to the petitioners more than one-and-a-half years ago, the agency had not filed any complaint on it in a time-bound manner. The summons as well as the investigation conducted in pursuance of the same ought to be set aside, they argued.
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