ED issues notice to CM Pinarayi Vijayan money laundering related to KIIFB masala bond

Thiruvananthapuram: In a major development in the controversial masala bond case, the Enforcement Directorate has issued a Rs 466-crore FEMA show cause notice to Kerala CM Pinarayi Vijayan, former finance minister Thomas Issac, and the CM's chief principal secretary K M Abraham, officials said on Monday.

The notice, which does not require a personal appearance, was issued about 10-12 days ago by the federal probe agency under the provisions of the Foreign Exchange Management Act (FEMA).

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ED has issued show cause notices to following noticees on 12.11.2025 during the proceedings of Adjudication in relation to contravention of provisions of FEMA and the RBI master Direction by Kerala Infrastructure Investment Fund Board (KIIFB) and its authorities amounting to Rs.466.91 crore.

1 Kerala Infrastructure Investment Fund Board (KIIFB)

2 Shri K.M. Abraham (CEO, KIIFB)

3 Shri Pinarayi Vijayan (Chairman, KIIFB)

4 Shri T M Thomas Issac (Vice Chairman, KIIFB)

Brief of the case

KIIFB, a body corporate, floated Masala Bond in London Stock Exchange and Singapore stock exchange to raise fund through Rupee denominated Bonds to the tune of INR 2672.80 Crores under ECB.

Part of the funds, to the tune of Rs.466.91 crore, were used for purchasing land which was specifically prohibited and the same is in contravention of Master Direction No. 5/2015-16 dated January 1, 2016 and Circular No.17 dated 29.09.2015 and the RBI direction issued under the letter dated 01.06.2018.

Accordingly, the complaint under FEMA was filed on 27.06.2025 and after taking cognizance of the same, show cause notices were issued on 12.11.2025 by the Adjudicating Authority. The notices are not required to appear in person.

However, the CPM state secretariat has slammed the move by the ED and said that the directorate is acting as per the pressure from the BJP central leadership and state leadership.

“The BJP is trying to pressurize the opposition and silence them using the investigating agencies”, said MV Govindan Master, CPM state secretary.

A show cause notice is issued after the end of the investigation in a FEMA investigation, and the contravention quantified in it is akin to a penalty.

The probe is related to the end-use of Rs 2,000 crore raised by KIIFB through masala bonds, and its compliance with the FEMA norms.

KIIFB (Kerala Infrastructure Investment Fund Board) is the primary agency of the state government for financing large and critical infrastructure projects and had raised Rs 2,150 crore in 2019 through its debut masala bond issue as part of its plan to mobilise Rs 50,000 crore to fund large and critical infrastructure projects in the state.