Sajan Parayil, 49, who hailed from Kannur district, on Tuesday hanged himself after an art convention he built by investing Rs 16 crore failed to get clearance from the Anthoor Muncipality.
Chief Minister Pinarayi Vijayan termed the incident as "unfortunate" and assured appropriate action.
"At times, there are negative approaches from officials. Let the report come and if anything wrong has been done, appropriate action will be taken against those responsible," Vijayan said in the Assembly on Wednesday.
Seeking leave for an adjournment motion, Congress MLA Sunny Joseph said the ease of doing business which the Left government often speaks about has fallen flat.
Joseph pointed out the Anthoor Muncipality was managed by the Communist Party of India-Marxist (CPI-M) and has no member of the opposition. He said the case should rather be treated like a "murder".
Speaking to the media, Leader of Opposition Ramesh Chennithala, who led the entire opposition out of the House after the Speaker disallowed the adjournment motion, claimed that this was the second suicide by a non-resident Keralite businessman and held the CPI-M responsible for Sajan's death.
"Sajan's suicide is because of the CPI-M, which failed to do the needful after he invested his life savings to set up the convention centre," said Chennithala.
Sajan's wife, Beena, in Kannur on Wednesday told the media that her husband was under tremendous stress, especially from the Chairperson of the Muncipality, who is the CPI-M's top leader M.V.Govindan's spouse.
( With inputs from IANS )