KIIFB Masala Bonds case: HC extends stay on ED proceedings against CM Vijayan, others
Relief till April 6 for Pinarayi Vijayan, Thomas Isaac, and KM Abraham as court continues to halt action on Rs 467-cr FEMA notice amid dispute over use of bond funds for land acquisition
Kochi, Mar 19 (PTI) The Kerala High Court has extended till April 6 its stay on any proceedings pursuant to the show cause notice issued to Chief Minister Pinarayi Vijayan by the ED in connection with the KIIFB Masala Bonds issue.
Justice Bechu Kurian Thomas granted the same interim relief to former state finance minister Thomas Isaac and Vijayan's Chief Principal Secretary and KIIFB CEO K M Abraham.
The matter will be taken up next on April 6.
The court had on December 18, 2025, stayed further proceedings on the show cause notice for three months.
The interim order came on the joint plea moved by Vijayan, Isaac and Abraham seeking quashing of the Enforcement Directorate (ED) show cause notices issued to them in November last year in connection with the use of the Masala Bond funds by the Kerala Infrastructure Investment Fund Board (KIIFB) for the acquisition of land for infrastructure projects.
A single judge bench of the High Court had on December 16, 2025 observed that according to the RBI's External Commercial Borrowings (ECB) framework, which came into effect from January 16, 2019 and governed the Masala Bonds, the definition of real estate activity does not include activities related to the infrastructure sector.
However, according to the central probe agency, the acquisition of land for infrastructure projects was a real estate activity and cannot be carried out using Masala Bond funds.
The ED had in November issued a Rs 467-crore FEMA contravention show cause notice to Vijayan, Isaac, and Abraham in the KIIFB Masala Bond case.
The notice pertains to the alleged contravention of FEMA provisions and the RBI master direction by KIIFB and its authorities, amounting to Rs 466.91 crore.
KIIFB is the primary agency of the state government for financing large and critical infrastructure projects. It had raised Rs 2,150 crore in 2019 through its debut masala bond issue as part of its plan to mobilise Rs 50,000 crore to fund large and critical infrastructure projects in the state. PTI