Amid rising political activity in Kerala, the Enforcement Directorate (ED) has issued a ₹466-crore FEMA show-cause notice to the state’s Chief Minister Pinarayi Vijayan, former Finance Minister Thomas Isaac, and the Chief Principal Secretary of the CM, K. M. Abraham, in connection with the KIIFB Masala Bond case. Officials confirmed the development on Monday.
According to sources, the notice was issued 10–12 days ago. Since it falls under the Foreign Exchange Management Act (FEMA), the recipients are not required to appear in person.
The notice relates to the use of ₹2,150 crore raised by the Kerala Infrastructure Investment Fund Board (KIIFB) through Masala Bonds in 2019. The investigation seeks to determine whether the funds were utilized in compliance with FEMA regulations. KIIFB is the state government’s primary agency for funding major infrastructure projects in Kerala.
Thomas Isaac described the ED’s notice as politically motivated. “This is routine election-time propaganda. The aim is to benefit the BJP and UDF. ED has repeatedly acted on the Masala Bond case during every election. When nothing was found, they have now adopted a new strategy,” he said.
Isaac added that he and his family members had previously been asked to provide bank records, which he called “an intrusion into my privacy.” He also noted that the High Court had asked the ED for clarification, which has not yet been provided.
Speaking on behalf of KIIFB, Isaac said, “The alleged violation concerns the use of some Masala Bond funds for land acquisition. But KIIFB did not purchase land; it acquired it, which is legally permissible. By the time the funds were used, the RBI had already lifted the restriction. We will provide a detailed response after consulting legal experts.”
Meanwhile, M. V. Govindan, Kerala State Secretary of CPI(M), reacted sarcastically to the ED action, saying, “Every election season, an ED notice appears. I was wondering why it hadn’t arrived this time, and now it has.”
The ED’s notice is expected to fuel fresh controversy in the state’s political landscape during the ongoing election period.
