ED issues show-cause notice to Kerala CM Pinarayi Vijayan in KIIFB masala bond probe

The Enforcement Directorate (ED) has issued a show-cause notice to Kerala Chief Minister Pinarayi Vijayan in connection with alleged violations linked to ‘masala bonds’ issued by the Kerala Infrastructure Investment Fund Board (KIIFB).

Former Finance Minister TM Thomas Isaac and KIIFB Chief Executive Officer KM Abraham also received notices from the ED.

KIIFB raised around Rs 2,150 crore through masala bond in March 2019 and listed it on the London Stock Exchange International Securities Market on April 1, 2019. The ED notice relates to the alleged use of funds raised through bonds to purchase land and alleged violation of FEMA norms.

The Chief Minister was informed that the ED notice was issued a few days ago.

Politically motivated: Isaac

Responding to the notice, Mr Isaac described the notices as “politically motivated and a smokescreen”.

ED has been regularly raising the issue of ‘masala bonds’ ahead of elections in Kerala, starting with the 2020 local body elections, he told reporters on Monday, December 1, 2025. He said that the Reserve Bank of India (RBI) is responsible for granting permission for masala bond and all actions are taken as per the approval of the RBI.

According to him, the ED has now submitted its charge to the Special Director ED (Judiciary), New Delhi and the Chief Minister himself and Mr. Abraham have been asked to explain before the arbitrator.

Mr Isaac said the land was never purchased using funds, but was purchased. “Also, the RBI had also removed the condition that the land cannot be purchased while purchasing,” he said, adding that legal advice would be sought to finalize the response to the notice.

Meanwhile, CPI(M) External Affairs Minister MV Govindan termed the notification sent by the ED to the Prime Minister as a “political ploy”. He said ED notifications coincided with elections in Kerala.

“ED has issued notifications during the 2020 local elections, 202 Assembly elections and 2024 Lok Sabha elections. This is a political game,” he said.

By issuing show notices, the ED challenged not the Chief Minister or Mr. Isaac but the people of Kerala. He said KIIFB has spearheaded development initiatives worth ₹1 lakh crore in the state.