What is Masala Bond Case? ED Issues Show Cause Notice to Kerala CM Vijayan, Ex-Minister Issac

The Enforcement Directorate has issued show cause notice to Kerala CM Pinayari Vijayan, former Kerala finance minister Thomas Issac and others in alleged violations linked to masala bonds issued by Kerala Infrastructure

Investment Fund Board, amounting to Rs 466.91 crores Former Kerala finance minister Thomas Issac told reporters that ED's show cause notice is "politically motivated and smokescreen." ED had issued SCN on 12th November during the proceedings of adjudication in relation of contravention of forex violation pertaining to FEMA and the RBI master direction by Kerala Infrastructure Investment Fund Board and its authorities.ED, Monday, said SCN has been issued to 1 Kerala Infrastructure Investment Fund Board (KIIFB)2 Shri K.M. Abraham (CEO, KIIFB)3 Shri Pinarayi Vijayan (Chairman, KIIFB)4 Shri T M Thomas Issac (Vice Chairman, KIIFB)Reacting to the development, Senior Congress leader K Muraleedharan said, "The Chief Minister keeps receiving notices from time to time. The intention is to force him into taking a pro-BJP stand, especially with the elections approaching. But no matter who tries to lift the BJP, it will not rise. They may try to intimidate occasionally, but eventually they will settle down."

Enforcement Directorate, in a statement, said Kerala Infrastructure Investment Fund Board , a body corporate, floated Masala Bond in the London Stock Exchange and the Singapore Stock Exchange to raise funds through Rupee-denominated Bonds to the tune of INR 2672.80 Crores under ECB. "Part of the funds, to the tune of Rs.466.91 crore, were used for purchasing land which was specifically prohibited and the same is in contravention of Master Direction No. 5/2015-16 dated January 1, 2016 and Circular No.17 dated 29.09.2015 and the RBI direction issued under the letter dated 01.06.2018," ED said in a statement. "The complaint under FEMA was filed on 27.06.2025 and after taking cognizance of the same, show cause notices were issued on 12.11.2025 by the Adjudicating Authority. The notices are not required to appear in person," ED said.

"Notices have been issued 19 days back on 12.11.2025 and the same are in relation to adjudication proceedings under FEMA. The noticees are not required to appear personally," the probe agency said