Kochi: The Kerala High Court has not stayed the Enforcement Directorate probe against the KIFFB, but has asked the investigation agency to submit a written reply to the allegations made by the petitioners.
The court did not issue an interim stay on the investigation despite repeated pleas by the Kerala Infrastructure Investment Fund Board (KIIFB) which has told the court that the Masala Bond was introduced with the permission of the apex bank RBI.
KIIFB said that the financial details of it were presented to the RBI every month and ED cannot accuse FEMA of violation as there is no complaint registered against it.
The KIFFB argued that the NHAI and NTPC have introduced masala bonds. The KIIFB accused the ED of aiming to tarnish its credibility.
On its part ED said that the investigation is being carried out on the basis of the CAG report which has raised some objections.
The CAG had issued warning for the third consecutive fiscal year stating that Kerala was facing dangers of fattening off budget borrowings and wanted borrowings of KIIFB to be included in annual budget documents.
Latest report said Kerala resorted to off-budget borrowings of Rs 9,273.24 crore during the 2020-21 fiscal.
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