KIIFB Masala Bond Probe: ED sends ₹466-cr FEMA notice to Kerala CM Vijayan and top aides

The Enforcement Directorate on Monday issued a show cause notice worth Rs 466 crore under the Foreign Exchange Management Act (FEMA) to Kerala Chief Minister Pinarayi Vijayan, former state finance minister Thomas Isaac and CM’s former principal secretary K M Abraham in connection with the KIIFB Masala Bond case, PTI reported citing officials as saying.

The notice, which does not require personal appearance, was issued about 10-12 days ago after the completion of the FEMA investigation. A show cause notice under FEMA is issued after quantifying alleged contravention and is considered equivalent to a financial penalty if confirmed by the adjudicating authority.

The probe relates to the end-use of funds raised through Masala Bonds by the Kerala Infrastructure Investment Fund Board (KIIFB) and their compliance with FEMA norms.


KIIFB, the state government’s main agency for funding large-scale infrastructure projects, had raised Rs 2,150 crore in 2019 via its debut Masala Bond on the London Stock Exchange as part of its wider target of mobilising Rs 50,000 crore for major infrastructure developments across Kerala.

Investigators examined whether the Rs 2,000 crore raised through the issue was utilised in accordance with external borrowing rules.