'RBI never raised any concerns over masala bonds': MV Govindan on ED notice

ED's Show-Cause Notices to Kerala Government: A Political Motive?

The Enforcement Directorate (ED) has issued show-cause notices in connection with alleged money laundering and FEMA violations related to the KIIFB masala bond issue. However, the CPM state secretary M V Govindan has strongly defended the transaction, stating that the funds were received with RBI approval.

• The masala bonds were received in 2019 with the Reserve Bank of India's permission.
• The RBI has not raised any concern regarding legal or procedural lapses.
• The ED has targeted the LDF government ahead of elections, according to Govindan.

Govindan accused the ED of acting out of political vendetta, citing previous investigations such as the Karuvannur cooperative bank case and the gold smuggling case, where the agency could not proceed due to a lack of evidence.

He also criticised the Congress leadership in Kerala for allegedly supporting the ED's actions locally, while the national leadership denounces the agency.

Govindan said that the LDF's local poll campaign is centred on development and welfare, with KIIFB playing a crucial role in enabling major infrastructure projects.

• KIIFB funding has enabled progress in public works, education, water supply, sports, tourism, transport, agriculture, and industry.
• The Modi government blocked Kerala's legitimate share of ₹1.70 lakh crore.

He also quoted figures presented in Parliament by Minister of State for Finance Pankaj Chaudhary, stating that since 2014, the ED registered 1,930 cases, but secured convictions in only two.

Over 95 per cent of these cases are against opposition leaders, according to Govindan. Two sitting Chief Ministers—Hemant Soren and Arvind Kejriwal—were jailed as part of this politically motivated assault, he added.

He also mentioned that cases are underway against Sonia Gandhi and Rahul Gandhi as well.

Key Figures:

• ₹2,672.80 crore: The amount raised by KIIFB through rupee-denominated masala bonds listed on the London and Singapore stock exchanges.
• ₹466.91 crore: The amount allegedly used for land acquisition, violating RBI rules and FEMA guidelines.
• June 27, 2025: The date when a complaint under FEMA was filed.
• ₹1.70 lakh crore: The amount blocked by the Modi government from Kerala's legitimate share.

Reaction from CPM:

Govindan's statement comes as a response to the ED's show-cause notices, which were issued on November 12 but received by the recipients only three days ago.

He said that the LDF's local poll campaign is centred on development and welfare, with KIIFB playing a crucial role in enabling major infrastructure projects.

He also accused the Congress leadership in Kerala of allegedly supporting the ED's actions locally, while the national leadership denounces the agency.

Previous Investigations:

Govindan cited previous investigations such as the Karuvannur cooperative bank case and the gold smuggling case, where the agency could not proceed due to a lack of evidence.

He also mentioned that the ED registered 1,930 cases since 2014, but secured convictions in only two.

Over 95 per cent of these cases are against opposition leaders, according to Govindan.

ED's Track Record:

Govindan questioned the ED's track record, citing figures presented in Parliament by Minister of State for Finance Pankaj Chaudhary.

He said that the ED's actions are politically motivated, as evident from the cases against opposition leaders.

He also mentioned that cases are underway against Sonia Gandhi and Rahul Gandhi as well.