Archive · 19 Dec 2025
ED Accuses Kerala Leaders of Forex Violations in KIIFB Masala Bond Case
The Enforcement Directorate (ED) in India has accused Kerala's Chief Minister Pinarayi Vijayan and former Finance Minister T M Thomas Isaac of breaking foreign exchange rules.
They say that Rs 466.91 crore from special bonds (called masala bonds) meant for infrastructure projects was wrongly used to buy land.
The bonds were issued by the Kerala Infrastructure Investment Fund Board (KIIFB) in 2019.
The ED says this goes against rules set by the Reserve Bank of India (RBI).
Vijayan and Isaac deny any wrongdoing, saying the ED is misinterpreting the rules.
The Kerala High Court has temporarily stopped further action in this case.
ED accuses Kerala CM Pinarayi Vijayan and former Finance Minister T M Thomas Isaac of forex violations involving Rs 466.91 crore from KIIFB masala bonds.
Bonds were issued in 2019 to finance infrastructure projects, but ED alleges funds were used for prohibited land acquisition.
RBI rules prohibit using masala bond proceeds for land purchase, except for specified categories.
KIIFB argues ED misinterpreted regulations and that land acquisition for public infrastructure is allowed under revised RBI frameworks.
Kerala High Court has stayed the ED's show-cause notice and further proceedings pending legal challenge.
- Who
- Kerala CM Pinarayi Vijayan, former Finance Minister T M Thomas Isaac, and KIIFB CEO K M Abraham
- What
- Alleged forex violations and diversion of masala bond proceeds for land acquisition
- When
- Bonds issued in March 2019, ED notice issued last month, case stayed this week
- Where
- Kerala, India
- Why
- Alleged violation of RBI rules on the use of masala bond proceeds
- Amount in question
- Rs 466.91 crore
- Year of bond issuance
- 2019
- Bonds raised
- Rs 2,150 crore
- RBI approval date
- June 1, 2018
- KIIFB's defense
- Misinterpretation of RBI regulations
- ED's allegation
- Diversion of funds for land acquisition
- Legal status
- Case stayed by Kerala High Court