Kochi – Dec. 11 (LatestNewsX) – The Kerala Infrastructure Investment Fund Board (KIIFB) filed a petition with the High Court on Thursday, asking it to invalidate the Enforcement Directorate’s adjudication notice related to the 2019 Masala Bond case.
After a brief hearing, the court scheduled the case for Tuesday to decide whether to grant an interim stay.
KIIFB urged that all actions under the ED notice be halted until a final judgment is rendered.
The objection originates from the ED’s claim that KIIFB misused Masala Bond money for property acquisitions, a charge the fund board adamantly denies.
KIIFB argues the proceeds were put solely into state development initiatives, such as land procurement for infrastructure projects.
They contend that buying land for government use is not “real estate activity” as the ED asserts.
However, the ED maintains that Masala Bond proceeds may only fund projects on existing government land or land bought with other funds.
According to the Additional Solicitor General, using those funds to buy land, even for state projects, breaches the restrictions tied to the foreign fundraising.
The ED claims KIIFB spent Rs 467 crore of the Rs 2,672 crore raised on land acquisition, violating FEMA rules.
The notice was also sent to Chief Minister Pinarayi Vijayan, former Finance Minister Thomas Isaac and other senior officials involved in the bond raise.
This action follows an earlier ED report concluding that the foreign raise had procedural lapses under FEMA.
The dispute has reignited at a politically charged juncture; the state government says the ED’s conclusions are “misinformed and misplaced” and insists all dealings were transparent, audited and in line with global infrastructure standards.
The High Court will review the interim relief plea on Tuesday, Dec. 16, and the ruling could shape the future of the state’s flagship infrastructure funding approach.
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