At the hearing before Justice VG Arun, Additional Solicitor General (ASG) SV Raju, submitted that the provisions of the Foreign Exchange Management (FEMA) Act require that the central agency must conduct an investigation in such situations to ascertain if there was a violation.
For the same, summoning the officers of the KIIFB is perfectly justified, he argued.
“ED’s case is not that there was violation as far as the issuance of masala bonds is concerned….Our case is that money has been diverted, money from masala bonds investment. So financial documents are required to investigate this. And the funds may have been diverted to family members also so their financial records are also needed,” the ASG submitted.
Source: Barandbench