Thiruvananthapuram: The Enforcement Directorate’s (ED) Adjudicating Authority has issued show cause notices to Kerala Chief Minister Pinarayi Vijayan and former Finance Minister Thomas Isaac in connection with the controversial Masala Bond transaction. The development follows an ED investigation that concluded the Kerala Infrastructure Investment Fund Board (KIIFB) violated provisions of the Foreign Exchange Management Act (FEMA) while raising funds through the Masala Bond.
According to sources, the ED’s final report on the matter was submitted to the Adjudicating Authority in Chennai nearly three months ago. Notices have now been served to the officials concerned based on this report.
The Chief Minister and other respondents have been given the opportunity to submit their replies legally — either in person, through a representative, or through legal counsel. Further action in the case is expected soon.
The Adjudicating Authority, based in Delhi, will examine the ED report and hear arguments from the four opposing parties, including the Chief Minister. If the authority confirms FEMA violations, KIIFB could face a penalty — which may go up to 300 percent of the total amount raised through the Masala Bond.
However, even if a penalty is imposed, KIIFB retains the legal right to challenge the ruling. The Adjudicating Authority comprises a three-member panel that will determine whether the ED’s findings hold merit. If confirmed, KIIFB can approach the Appellate Tribunal as the next legal step.
