But Thomas Isaac’s explanation is that he will not attend and there are three classes at EMS Academy. It has been a few years since the ED has declined as a political arm of the BJP. Let them continue their politics, he said. Thomas Isaac says that the ED has been trying to find out the FEMA violation that RBI has not seen for the past two years. Thomas Isaac’s response was through a Facebook post.
Also Read-Thomas Isaac | Dealing in Kifbi ; ED notice to former finance minister Thomas Isaac
Facebook post by Thomas Isaacs
Again ED against KifB. Summons of ED to appear with account book and all other documents was received by e-mail some time ago. Even sent by speed post on 13-07-2022. Also sent to the above address at Kalavur, Alappuzha where I lived 15 years back. Then even when ED leaked the summons to some journalists, I did not receive it. Then it’s game time.
But I feel that the maximum that ED can do has been done two years ago. C&AG, Income Tax Department and ED tried to set a trap. Nothing happened. The people of Kerala rejected these accusations. Now what is the purpose of the new exodus?
BJP should have some new political plan. It has been a few years since the ED has declined as a political arm of the BJP. Let them continue their politics. Let us have ours.
What are the issues raised so far in connection with the ED investigation?
The Enforcement Directorate is the central government agency to investigate foreign exchange violations, black money etc. The issue of Kifbi Masalabond has been accused of violating the Foreign Exchange Act.
The first argument is that the State Government has no power to take masala bond. It is true that the state government has not. But Kifbi does not mean state government. KifB is a “body corporate”. This is specified in the Kifbi Act passed by the Assembly.
According to the Constitution, the Central Government is empowered to make laws regarding foreign credit and foreign exchange. Thus, the Foreign Exchange Management Act (FEMA) is a law made by the central government. The Reserve Bank is vested with the power to regulate foreign loans under the FEMA Act. Using this authority the Reserve Bank issued a Master Circular (RBI/FED/2015-16/15 FED (Master Direction No.5/2015-16)). Provisions regarding Masalabonds are contained in Section III of the Master Directive. Section (3.3.2) deals with who can issue Masalabonds. Accordingly, body corporates have the right to borrow masala bonds. Any corporate or body corporate is eligible to issue such bonds.
Masalabonds below $700 million will be available through a very simple process. No need to attend in person. Applications and clarifications should be submitted through agencies such as authorized banks. The application was made through Axis Bank as per the procedures prescribed by RBI. On June 1, 2018, approval was also received from the Reserve Bank of India to issue masala bonds worth Rs 2150 crore.
Let’s say something in the group. After the Kifbi controversy, the right of body corporates to issue masala bonds was taken away through an amendment to the statute. On January 16, 2019, RBI amended the rules. Accordingly, Kifbi cannot issue masala bonds in future. Kifbi Masala bond had already been issued before this amendment. Therefore, the amendment does not apply to Kifbi loans.
Kifbi is not the first firm to get permission to launch Masalabond in India. For example, the central government’s National Highways Authority (NHAI) has a similar legal status to KIFB. RBI has given permission to NHAI to raise Rs 5000 crore through Masalabond and they have issued bonds. Is KIIFB taking only FEMA violation and black money?
Apart from taking permission from the Reserve Bank, every month the use of loan money is submitted to the Reserve Bank in a prescribed form. So far RBI has not seen anything illegal in this. For the last two years, ED has been trying to find out the FEMA violation that the Reserve Bank has not yet seen. I have now been summoned for further clarification.
Perhaps because FEMA is a civil law, the ED has decided to strike down the Anti-Money Laundering Act to add spice to the case. KYC checks everything and deposits money in Masalabond through authorized public sector banks. This money is given from KIFB to public sector implementing agencies through banks. At what stage can black money be loaded and ‘laundered’?
Now the matter of attendance. Not tomorrow anyway. EMS Academy has three classes. Later the party will discuss and decide.
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