ED sends show-cause notice to Kerala CM, Ex-Finance Minister in Rs 2000 cr Masala bond case

Mangalore Today News Network

New Delhi, Dec 1, 2025: The Enforcement Directorate (ED) issued a Rs 466-crore FEMA show-cause notice to Kerala Chief Minister Pinarayi Vijayan, his chief principal secretary, KM Abharam, and former finance minister Thomas Issac in connection with the KIIFB Masala Bond case.

According to the officials, the notice was sent nearly 10-12 days back by the federal probe agency under the provisions of the Foreign Exchange Management Act (FEMA), and it does not need a personal appearance.

The probe by the agency focuses on how KIIFB used the Rs 2,000 crore it raised through masala bonds and whether these transactions followed FEMA rules.

A probe into the flow of the funds and the manner in which they were deployed after

What’s The Case?

The Enforcement Directorate’s inquiry focuses on how KIIFB used the Rs 2,000 crore it raised through masala bonds and whether these transactions followed FEMA rules. Officials are investigating the flow of funds and the manner in which they were deployed after the bond issue.

KIIFB, or the Kerala Infrastructure Investment Fund Board, is the state government’s main body responsible for arranging money for major infrastructure works.

In 2019, it entered the international market for the first time with its debut masala bond issue. The agency raised Rs 2,150 crore as part of a larger plan to mobilise Rs 50,000 crore for roads, schools, hospitals and other large public projects across Kerala.

The bond issue was widely seen as an ambitious move by the state government at the time. Now, investigators are looking into the end use of the funds to determine whether all guidelines and foreign exchange rules were properly followed.

Further examination of documents and financial records is underway.