KM Abraham, Managing Director, Kerala Infrastructure and Investment Fund Board (KIIFB)
Kerala Infrastructure Investment Fund Board (KIIFB) CEO KM Abraham slammed the Enforcement Directorate (ED), saying the allegations in the show cause notice issued in connection with the KIIFB masala bond “are based on false information, misrepresentation of facts and misunderstanding of the applicable regulations”.
In a scathing reply to the show cause notices issued to him, Chief Minister Pinarayi Vijayan and former finance minister TM Thomas Isaac, Mr Abraham said the timing of the show cause notice ahead of the upcoming elections “raises disturbing questions and doubts about the bona fides of the entire process of issuing this show cause notice”.
Mr. Abraham said that not a single rupee of the masala bond proceeds was used for any purpose violating the provisions of the Foreign Exchange Management Act (FEMA) or Reserve Bank of India (RBI) guidelines. According to him, the masala bond proceeds were deployed in strict compliance with the FEMA and RBI External Commercial Borrowing (ECB) guidelines as they stood in 2019.
“As CEO, I wish to state categorically and unequivocally: KIIFB has not violated any provision of the Foreign Exchange Management Act (FEMA) or any other law,” he said.
He said the allegation in the notification that ₹466 crore was spent on land purchase is completely false. According to him, in this regard, “perhaps the most disturbing aspect of the ED notification is the gross misrepresentation of facts”. The actual expenditure on land acquisition was only ₹66 crore, all for legitimate infrastructure purposes, he said.
“The Show Cause Notice alleges that ₹466 crore from the proceeds of the Masala Bond was used for the purchase of land, referring to a table in the complaint filed by the Deputy Director (ED), Kochi. No such table was submitted by the KIIFB as proof of actual deployment of the funds mobilized through the Masala Bond. So this statement was not entirely fabricated to use these funds to end the fabrication,” he said.
Mr Abraham said there is a clear distinction between land acquisition for public infrastructure and commercial land purchase, which has been recognized by authorities including the Comptroller and Auditor General of India (CAG). KIIFB used the proceeds exclusively to purchase land for infrastructure projects. Not a single rupee was spent on commercial land purchase or real estate investment, which is what the RBI directive seeks to curtail.
In what he described as a “disturbing pattern”, Mr Abraham noted that the ED issued the first set of notices and summons in early 2021, just months before the Legislative Assembly elections. Another summons was summoned by Dr. Isaac just before the 2024 Lok Sabha elections. And now came announcements of demonstration events ahead of the 2026 parliamentary polls, he said.
On the way forward, he said the KIIFB would file a “comprehensive and detailed response” to the notice. “KIIFB will also pursue appropriate legal remedies against procedural improprieties, including the use of materials collected through subpoenas that are subject to judicial challenge and the deliberate leaking of confidential communications to the media,” he said.
Published – 01 Dec 2025 20:17 IST
