High-Stakes Alert: Kerala's KIIFB Masala Bond Under Scrutiny

The Enforcement Directorate has issued a Rs 466-crore FEMA show cause notice to Kerala CM Pinarayi Vijayan and others concerning the KIIFB Masala Bond case. The notice, linked to FEMA compliance, investigates the end-use of Rs 2,000 crore raised by KIIFB through masala bonds.

The Enforcement Directorate has taken significant action by issuing a Rs 466-crore FEMA show cause notice involving Kerala Chief Minister Pinarayi Vijayan, former finance minister Thomas Issac, and CM's chief principal secretary K M Abraham concerning the KIIFB Masala Bond case.

This action follows after an investigation into the usage of Rs 2,000 crore raised by KIIFB through masala bonds, focusing on whether these funds adhered to the FEMA guidelines. The federal probe agency issued the notices about 10-12 days ago, as per the officials, under the Foreign Exchange Management Act (FEMA).

It should be noted that while such a notice demands accountability, it doesn't require personal appearances from those involved. The Kerala Infrastructure Investment Fund Board (KIIFB) was established to finance crucial state infrastructure and had mobilized Rs 2,150 crore through its debut masala bond issue in 2019 aiming for a total of Rs 50,000 crore for various projects.

(With inputs from agencies.)