Thiruvananthapuram Dec 2 The Kerala Infrastructure Investment Fund Board (KIIFB) on Monday night strongly refuted allegations raised by the Enforcement Directorate (ED) in its show-cause notice issued on November 28, which claims that Rs 466 crore from the 2019 Masala Bond proceeds were used in violation of FEMA provisions for land purchases.
The notices were served on Chief Minister Pinarayi Vijayan, former Finance Minister Dr Thomas Isaac, and K.M. Abraham, KIIFB CEO, who has publicly rebutted the claims, calling them “factually baseless and legally untenable.”
In a detailed rejoinder issued here by Abraham, it said that the funds raised through the Rs 2,150 crore Masala Bond — India's first sub-sovereign offshore bond listed on the London Stock Exchange — were deployed strictly as per RBI’s External Commercial Borrowing guidelines.
“Only Rs 66 crore was spent on land acquisition, and all for public infrastructure projects, not for speculative or commercial real estate transactions,” stated Abraham in his statement.
The statement alleged that the ED’s figures were based on fabricated or misrepresented data, ignoring documents already submitted to investigators.
KIIFB said all deployment records, monthly certifications, and audited reports were submitted to RBI and ED, and no regulatory breach had ever been flagged by auditors.
Accusing the agency of timing actions to coincide with elections, KIIFB cited earlier notices issued just ahead of the 2021 Assembly and 2024 Lok Sabha polls.
The CEO also raised concerns about “selective media leaks” of confidential notices within a day of issuance, describing them as attempts to influence public perception.
KIIFB further noted that the ED’s adjudication process is proceeding despite a pending writ in the Kerala High Court questioning the agency’s jurisdiction over the Masala Bond inquiry.
Reaffirming its position, KIIFB said it would file a comprehensive legal response refuting all allegations and uphold its transparent track record of financing more than Rs 60,000 crore worth of infrastructure projects in healthcare, education, transport, and industrial development.
“The deployment of Masala Bond proceeds has been entirely lawful, audited, and in service of Kerala’s infrastructure development,” added Abraham, asserting that KIIFB would defend its credibility through due legal process.
On Monday, the news surfaced that the ED issued a notice and quick to latch on were all the top Congress leaders.
Leader of Opposition V.D. Satheesan alleged that they had long flagged the "mystery-laden transaction", accusing the government of borrowing Rs 2,150 crore from international markets at a steep 9.723 per cent interest rate, resulting in a total repayment of Rs 3,195 crore in just five years—an interest burden of Rs 1,045 crore.
"This is not normal. Nearly half the principal was lost to interest. Instead of using the state’s sovereign guarantee, which could have secured funding at barely 1.5 per cent interest, the government opted for exorbitant rates," he said.
Satheesan alleged that the deal violated Article 293(1) of the Constitution and involved CDPQ, a firm linked to SNC-Lavalin.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor