Abraham said the ED's conclusion stems from a misunderstanding of the difference between land acquisition for public infrastructure and land purchase.KIIFB masala bond, Enforcement Directorate investigation, Dr K M Abraham statement, Kerala infrastructure projects, Masala bond controversy, RBI ECB guidelines, FEMA violations KIIFB, Political interference ED, Land acquisition controversy Kerala, Sub-sovereign masala bond, KIFFB's use of masala bonds in infrastructure projects, KIFFB Enforcement Directorate allegations, KIFFB chief refutes ED notice, Kerala government masala bonds criticism, KIIFB masala bond: an overview

ED fabricated ₹466 cr figure, used ₹66 cr masala bond funds for legitimate land acquisition: KIIFB

KIIFB CEO Strongly Denies ED Allegations Over Masala Bond Issue

Thiruvananthapuram: Kerala Infrastructure Investment Fund Board (KIIFB) Chief Executive Officer Dr K M Abraham has refuted allegations made by the Enforcement Directorate (ED) in its recent show-cause notice linked to the 2019 masala bond issue.

Background and Allegations

Abraham, along with Chief Minister Pinarayi Vijayan and former Finance Minister T M Thomas Isaac, received the notice on November 28.

The core allegation is that KIIFB used ₹466 crore of masala bond proceeds for land purchase, which Abraham calls "entirely false".
The ED had misrepresented figures despite having access to audited deployment records.

KIIFB's Response

Abraham said the ED's conclusion stems from a misunderstanding of the difference between land acquisition for public infrastructure and land purchase for investment.

KIIFB raised ₹2,150 crore through India's first sub-sovereign masala bond, listed on the London Stock Exchange, and every rupee was deployed in compliance with the Reserve Bank of India's External Commercial Borrowing guidelines and FEMA provisions.

Funds were used for infrastructure projects across key sectors.
Audited monthly by an independent chartered accountant.

Abraham added that only about ₹66 crore from the masala bond was used for land acquisition linked to infrastructure projects, which was permissible under RBI rules.

Accusations Against ED

Abraham accused the ED of "fabricating" a table showing the alleged ₹466 crore utilisation and of leaking selective portions of the show-cause notice to the media despite its confidentiality.

He said KIIFB had already submitted the correct figures and supporting documents to the ED in 2022.

Independent authorities, including the Comptroller and Auditor General, had recognised the use of masala bond funds for land acquisition in infrastructure projects as legitimate.
Alleging a pattern of political interference, Abraham said ED actions in 2021, 2024, and now in 2025 coincided with election cycles.

Next Steps

Abraham said KIIFB would respond to the notice in accordance with legal procedure.

The statement also cited the evolution of RBI's ECB guidelines, arguing that the prohibition on using such funds for land acquisition was removed in 2016, with later updates clarifying that the restriction applied only to commercial real-estate purchases, not acquisition required for public projects.