Kerala CM, Former Minister, and KIIFB CEO Under ED Scrutiny
The Enforcement Directorate (ED) has issued show-cause notices to Kerala Chief Minister Pinarayi Vijayan, former Finance Minister Thomas Isaac, and Kerala Infrastructure Investment Fund Board (KIIFB) CEO Dr. K M Abraham regarding alleged violations of the Foreign Exchange Management Act (FEMA). The notices are connected to the issuance of masala bonds by KIIFB.
Details of the Investigation
The ED's investigation focuses on potential irregularities in how funds raised through the masala bond were utilized. The adjudicating authority of the ED served the notices after a preliminary investigation revealed possible FEMA violations.
Key Individuals Involved
- Pinarayi Vijayan: Current Chief Minister of Kerala and Chairperson of KIIFB.
- Thomas Isaac: Former Finance Minister of Kerala and Vice-Chairperson of KIIFB in 2019.
- Dr. K M Abraham: Former IAS officer and current CEO of KIIFB.
KIIFB and Masala Bonds
KIIFB is a state agency responsible for mobilizing funds for infrastructure projects in Kerala, supplementing budgetary allocations. In 2019, during Isaac's tenure as Finance Minister, the CPI(M) government issued masala bonds to raise capital for infrastructure development.
What are Masala Bonds?
Masala bonds are rupee-denominated bonds issued to overseas investors. This means the issuer raises money in a foreign currency but repays the debt in Indian rupees, shielding investors from currency risk.
Next Steps
The individuals served with notices are required to respond to the ED, providing explanations and documentation to address the alleged FEMA violations. The ED will then review the responses and determine whether further action is warranted.
