Thiruvananthapuram, Dec 1 (NationPress) In a notable turn of events with substantial political and financial consequences, the Enforcement Directorate’s (ED) Adjudicating Authority has delivered show-cause notices to Kerala Chief Minister Pinarayi Vijayan, former Finance Minister Dr T.M. Thomas Isaac, KIIFB CEO K.M. Abraham, and other high-ranking officials regarding purported infringements of the Foreign Exchange Management Act (FEMA) linked to the issuance and utilization of Masala Bonds by the Kerala Infrastructure Investment Fund Board.

The CPI(M) promptly reacted, asserting that this action is merely a “politically motivated” initiative.

Preliminary findings from the ED suggest that KIIFB breached FEMA regulations in 2019 when it raised Rs 2,150 crore through Masala Bonds listed on the London Stock Exchange at an interest rate of 9.72 percent.

The investigation claims that funds secured through foreign borrowing were allocated to domestic infrastructure projects, which purportedly violates FEMA guidelines.

The decision to advance with the bond issuance was concluded in a KIIFB Board meeting chaired by the Chief Minister on January 17, 2019.

Three months ago, the ED submitted its final report to the Adjudicating Authority in Chennai, resulting in the issuance of the notices last week.

Sources indicate that further actions will be taken after the respondents are asked to provide explanations.

The Delhi-based Adjudicating Authority will now assess the ED’s findings, hear arguments from all involved parties, and ascertain if any FEMA violations transpired. If confirmed, penalties of up to 300 percent of the total amount raised could be imposed.

Amid speculation about potential arrest proceedings against the Chief Minister, legal experts suggest that such actions are unlikely at this stage, as the case remains in the adjudication process. Those who received notices can respond either directly or through legal representatives.

Following the hearings, KIIFB reserves the right to contest any adverse decision before the Appellate Tribunal.

The ED had previously summoned Dr. Thomas Isaac twice during a three-year investigation.

Officials acquainted with the case revealed that all financial documents and procedural approvals submitted by KIIFB were meticulously examined prior to the issuance of the notices.

This situation marks one of the most prominent financial scrutiny cases involving a state-run agency.

The Adjudicating Authority’s decision is anticipated to carry extensive legal, administrative, and political repercussions in Kerala. Those served notices have been granted 30 days for their replies.