The KIIFB case involves allegations of irregularities in its external commercial borrowings (ECB), specifically concerning Rs 2,672.80 crore raised through Masala Bonds on foreign stock exchanges for infrastructure projects.

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

Kerala Chief Minister Faces Show Cause Notices Over Alleged FEMA Violations

The Enforcement Directorate (ED) has 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).

Notice Details

Date of issuance: November 12, 2025
Noticees: Pinarayi Vijayan (Chairman, KIIFB), KM Abraham (CEO, KIIFB), T M Thomas Issac (Vice Chairman, KIIFB), and KIIFB
No personal appearance required

Allegations and Case Background

The case concerns alleged irregularities in KIIFB's external commercial borrowings (ECB) through Masala Bonds issued on the London and Singapore Stock Exchanges.

KIIFB raised Rs 2,672.80 crore via rupee-denominated bonds for infrastructure funding
A portion of the raised funds, amounting to Rs 466.91 crore, was allegedly 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
A June 1, 2018, RBI communication reiterating the restriction was cited by officials

Formal Complaint and Adjudication Proceedings

A formal complaint under FEMA was filed on June 27, 2025.

The adjudicating authority examined the matter and issued the show cause notices
The development marks a significant escalation in the ongoing inquiry surrounding KIIFB's financial operations and borrowing practices through international markets