Masala Bonds case: Kerala High Court suggests Thomas Isaac to cooperate with ED summons under Court's watch

The Kerala High Court on Friday urged former State Finance Minister Dr. Thomas Isaac and officials of the Kerala Infrastructure Investment Fund Board (KIIFB) would be willing to attend the fresh summons issued by the Enforcement Directorate (ED) in the Masala Bonds case if the Court were to keep a watch over the matter. .Justice Devan Ramachandran made the suggestion while hearing a petition filed by Isaac and KIIFB against the ED summons. "I would like to suggest, if you want you can cooperate with the summons once. This is just a suggestion. I will ensure there is no arrest, no intimidation. It is no humiliation. Anyone who gets a summons is accepted to answer. It is just a preliminary inquiry," Justice Ramachandran said. Advocate Jaideep Gupta who represented Thomas Isaac and Senior Advocate Arvind Datar who appeared for KIIFB, told the Court that they would get instructions from their clients on this suggestion. ."I am making this suggestion because they (ED) say it is not a crime but a preliminary enquiry. We can make sure if they want to take it forward. I said I can keep it pending and watch. It will completely be under the gaze of the court," the judge added before adjourning the hearing till February 19. .Notably, this is the second time that the ED has issued summons to Isaac and KIIFB officials in connection with the Masala Bonds case. The matter involves allegations that the Foreign Exchange Management Act (FEMA) was violated in the KIIFB's issue of 'Masala Bonds' or rupee-denominated bonds issued outside India by Indian entities. The KIIFB is a State agency that acts to secure investment for large and critical public infrastructure projects in Kerala. The Masala Bonds under the ED's scanner were issued by KIIFB in 2019, and reportedly raised around ₹2,150 crores. However, the ED launched a probe into these bonds after suspecting FEMA violations in the fund-raising venture. .Petitions were first filed by Isaac and KIIFB officials in 2022 before the High Court challenging the ED summons issued to them in the matter. However, in December 2023, the ED informed the High Court that it had decided to withdraw the summons issued in the matter. At the time, the Court had clarified that the ED was still free to continue its probe in the Masala Bonds case. .After the ED issued fresh summons to Isaac last month, Isaac and KIIFB filed another round of petitions challenging such action.