Kerala Infrastructure Investment Fund Board Battles Allegations over Masala Bonds

KIIFB has contested an ED complaint regarding its use of funds from Masala Bonds for land acquisition, labeling the claims as baseless. The ED alleges that these actions violate RBI guidelines. The Kerala High Court has reserved its order on the case's maintainability, while KIIFB asserts the proceedings could harm its financial credibility.

The Kerala Infrastructure Investment Fund Board (KIIFB) is challenging an Enforcement Directorate (ED) complaint over its use of Masala Bond funds for land acquisition. The funds, meant allegedly for inappropriate use under RBI directives, have sparked a legal debate in the Kerala High Court, which is reserving judgment on the plea's maintainability.

Amidst the legal tussle, KIIFB argued that its actions do not constitute a breach of foreign exchange regulations and stressed that the alleged contraventions are without legal basis. The Board further contended that the restrictions cited are irrelevant to property acquisition for infrastructure development.

Should proceedings continue, KIIFB warns of severe repercussions, warning that potential adjudication could drastically affect Kerala's infrastructure projects and its capacity to fulfill legal financial commitments. This financial uncertainty risks impacting investment perceptions and hampering KIIFB's ongoing projects valued at thousands of crores.

(With inputs from agencies.)