JOIN USOpposition leader supports former minister Isaac’s petition against ED
Leader of the Opposition in Kerala, V D Satheesan came out in support of former minister and Communist Party of India (Marxist) (CPM) leader Thomas Isaac for his petition against the Enforcement Directorate (ED).
This was an important development in Kerala politics, as the Congress party in Kerala implied its agreement with the CPM’s stand against the central agency in connection with its inquiry into Kerala Infrastructure Investment Fund Board (KIIFB)’s external borrowings.
Strong protests against the ED by the Congress party at national level, regarding the central agency’s actions against top leaders Sonia Gandhi and Rahul Gandhi, has put the opposition party in Kerala with no option other than to support the CPM.
Former state finance minister Thomas Isaac, who was summoned by the ED in connection with the inquiry into KIIFB’s borrowings, along with five other Left-front MLAs moved the Kerala High Court, questioning the ED’s investigation into the KIIFB raising foreign funds through masala bonds.
Isaac had challenged the ED summons to him, stating that the ED had no power to inquire into the matter involving Foreign Exchange Management Act (FEMA), and it was for the Reserve Bank of India (RBI) to look into it, even if there was any FEMA violation.
CPM leader Isaac alleged that the ED was carrying out a fishing and roving enquiry into a matter that did not come under its purview. ED had issued two summonses to Isaac, without mentioning the offences against him, even as the central agency was inquiring into the matter for more than a year. KIIFB had issued the masala bonds with RBI’s nod, he said.
The ED informed the high court on Thursday that Isaac was being summoned just as a witness to collect information. The ED also stated that Isaac need not appear before it until the high court takes up the petition for consideration again.
Supporting Isaac’s stand, opposition leader V D Satheesan also said that ED had no powers on the masala bond issue, as the matter did not come under the purview of Prevention of Money Laundering Act. Satheesan, however, clarified that the Congress believed that external borrowing by the KIIFB was improper and against the Constitution. Borrowings by KIIFB would also become the state's liability in future, he said.
Five Left-front MLAs petitioned the high court alleging that ED’s moves against the KIIFB would derail the infrastructure development projects in the state, as the board funded most of them.
The ED had opened an investigation into the alleged violations in KIIFB’s transactions—such as issuing masala bonds and trading in London Stock Exchange to raise Rs 2,150 crore—after the Comptroller and Auditor General noted that the external fund raising by the state government agency was against the Constitution.