ED Issues Show-Cause Notices to Kerala CM, KIIFB Officials Over Alleged FEMA Violations Worth Rs 466.91 Cr

New Delhi: The Enforcement Directorate (ED) issued show cause notices to Kerala Chief Minister Pinarayi Vijayan and officials of the Kerala Infrastructure Investment Fund Board (KIIFB) in connection with alleged violations under the Foreign Exchange Management Act (FEMA), officials said.

The notices were issued 19 days back on November 12, 2025, during adjudication proceedings, said the officials, adding, “The noticees are not required to appear personally.” Besides the Kerala CM (Chairman, KIIFB), the notices were issued to KM Abraham (CEO, KIIFB), T M Thomas Issac (Vice Chairman, KIIFB), and KIIFB.

The case concerns alleged irregularities in KIIFB's external commercial borrowings (ECB) through Masala Bonds issued on the London and Singapore Stock Exchanges. Officials said the KIIFB had raised Rs 2,672.80 crore via rupee-denominated bonds for infrastructure funding.

However, it is alleged that "a portion of the raised funds -- amounting to Rs 466.91 crore -- was used for purchasing land, a transaction reportedly prohibited under the Reserve Bank of India's Master Direction No. 5/2015-16 and Circular No. 17 dated September 29, 2015."

The officials also cited a June 1, 2018, RBI communication reiterating the restriction. A formal complaint under FEMA was filed on June 27, 2025. After examining the matter, the adjudicating authority issued the notices. The development marks a significant escalation in the ongoing inquiry surrounding KIIFB's financial operations and borrowing practices through international markets. 

(Further details awaited) 

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