Thiruvananthapuram: The Enforcement Directorate has issued a show cause notice to Kerala Chief Minister Pinarayi Vijayan in connection with the 2019 masala bond issued by the Kerala Infrastructure Investment Fund Board. Former finance minister Thomas Isaac and KIIFB chief executive officer K M Abraham have also received notices related to the same case.

The notice has been issued under the Foreign Exchange Management Act. According to the Enforcement Directorate, around 466 crore rupees linked to the funds raised through the masala bond was allegedly used in a way that violated foreign exchange rules. The agency claims that the borrowing was meant for specific permitted purposes and that the funds may have been diverted for activities not allowed under the law.

The 2019 masala bond raised about 2150 crore rupees from international markets to finance infrastructure development in Kerala. This was the first time a state-funded institution in India had raised money through such a method.

Officials stated that the notice does not require the chief minister or others to appear in person. They can respond through legal representatives. The current step is part of the adjudication process and does not imply a final decision. The Enforcement Directorate submitted its investigation report earlier, after completing inquiries that lasted over three years.

Opposition parties in Kerala have reacted strongly, saying the notice raises serious questions about financial management and accountability. The ruling party has dismissed the allegations and described the notice as politically motivated.

Legal experts say the next steps will depend on the written responses and hearings that follow. Any penalty or further action will be decided only after the adjudicating authority completes the review.

The matter is likely to continue to be a major political and legal issue in the state in the coming weeks.