Kerala High Court Stays Proceedings in KIIFB Masala Bonds Case

The Kerala High Court has ordered a three-month stay on proceedings following the issuance of show cause notices against Chief Minister Pinarayi Vijayan, former finance minister Thomas Isaac, and KIIFB CEO K M Abraham by the Enforcement Directorate concerning the KIIFB Masala Bonds issue.

In a significant legal development, the Kerala High Court has temporarily halted any proceedings for three months following the show cause notices served to Chief Minister Pinarayi Vijayan, former finance minister Thomas Isaac, and KIIFB CEO K M Abraham. These notices were issued by the Enforcement Directorate in connection with the high-profile KIIFB Masala Bonds case.

The court's order came in response to a joint petition filed by the trio aiming to quash the notices concerning the use of Masala Bond funds by the Kerala Infrastructure Investment Fund Board (KIIFB) for land acquisition intended for infrastructure projects. The Chief Minister, alongside Isaac and Abraham, argued their case based on a previous interim relief provided to KIIFB itself.

The Enforcement Directorate's notice under the FEMA Act claimed improper utilization of funds, asserting the acquisition fell under real estate, contrary to RBI guidelines. The next hearing is slated for January 23, 2026. KIIFB, as the main state agency, had initially raised Rs 2,150 crore in 2019 via its Masala Bond initiative.

(With inputs from agencies.)