Kerala Chief Minister and Officials Face Rs 467-Crore FEMA Violation Charge

The Enforcement Directorate has issued a Rs 467-crore FEMA contravention show cause notice to Kerala Chief Minister Pinarayi Vijayan and others over the alleged breach of FEMA provisions by KIIFB in the Masala Bond case. The funds were used for prohibited land purchases following the 2018 floods.

The Enforcement Directorate (ED) has issued a show cause notice for a Rs 467-crore FEMA contravention to Kerala Chief Minister Pinarayi Vijayan, former finance minister Thomas Issac, and the CM's chief principal secretary K M Abraham. The notice pertains to the KIIFB Masala Bond case, officials confirmed on Monday.

Issued on November 12, the notice alleges a breach of Foreign Exchange Management Act (FEMA) provisions by the Kerala Infrastructure Investment Fund Board (KIIFB). The alleged contravention of Rs 466.91 crore stems from funds prohibited for land purchase, contrary to Reserve Bank of India directives, officials indicated.

The Kerala state, however, has consistently denied any misdoing in the matter. The KIIFB raised Rs 2,672.80 crore to fund infrastructure projects after the 2018 floods. The ED's probe scrutinized the end-use of Rs 2,000 crore acquired via Masala Bonds, ensuring compliance with FEMA norms.

(With inputs from agencies.)