Masala bonds: Kerala HC extends stay on ED show-cause notice to KIIFB

The Kerala High Court has extended up to January 13 the stay on the show cause notice that the Directorate of Enforcement (ED) issued to the Kerala Infrastructure Investment Fund Board (KIIFB) on the masala bonds issue. This was after the State government sought more time to file its affidavit on the alleged Foreign Exchange Management Act (FEMA) violations in issuing the masala bonds.

A Division Bench of the High Court had on December 20 reserved its judgment on an appeal filed by the ED against a three-month interim stay issued by a single judge on a notice issued by the ED to the KIIFB on the utilisation of funds raised through masala bonds. The ED had initiated proceedings against KIIFB and issued notice under FEMA.