The Enforcement Directorate (ED) has issued a show-cause notice to Kerala Chief Minister Pinarayi Vijayan regarding the alleged violation of Foreign Exchange Management Act (FEMA) rules in connection with the masala bond issue by the Kerala Infrastructure Investment Fund Board (KIIFB).
Similar notices have also been served on Former Finance Minister Thomas Isaac and KIIFB CEO KM Abraham.
- Chief Minister Vijayan is the chairperson of KIIFB, a state-government body established to finance major infrastructure projects.
- Isaac was the Finance Minister in 2019 when KIIFB raised $2150$ crore (Rs $2150$ crore) through the masala bonds.
- Abraham also serves as the Chief Principal Secretary to the Chief Minister.
The ED’s notice asks the three individuals to provide their explanations to the adjudicating authority, alleging that the money raised through the masala bonds was illegally used for infrastructure development.
Isaac Calls Allegations Politically Motivated
In response, former Finance Minister Thomas Isaac stated that the show-cause notice is a gimmick orchestrated by the BJP-led central government with an eye on the upcoming elections.
He defended the fund’s utilization, noting that:
- The Reserve Bank of India (RBI) restricts the purchase of land using masala bond funds.
- While a portion of the funds was used to acquire land for a KIIFB project, this purchase occurred before the RBI restriction came into effect.
- He insisted that all prevailing norms, including those set by the RBI, were followed both in the bond issue and the use of the funds.
Isaac further alleged that the ED is being misused by the central government ahead of the local self-government elections in Kerala, calling it part of a “lagrey conspiracy” by the BJP, which he believes the people of Kerala will reject.
Background
Earlier in 2024, the ED had summoned Isaac for interrogation. However, the High Court restricted the agency from doing so following a petition filed by Isaac. The ED subsequently submitted a charge sheet before the adjudicating authority, which led to the issuance of these show-cause notices. (TNIE)
For more details: Navamalayalam.com
