Thiruvananthapuram, Dec 2 (NationPress) The Kerala Infrastructure Investment Fund Board (KIIFB) vehemently denied the allegations made by the Enforcement Directorate (ED) in a notice dated November 28. The notice claims that ₹466 crore from the proceeds of the 2019 Masala Bond was misused for land acquisitions, violating FEMA regulations.

Notices were directed to Chief Minister Pinarayi Vijayan, former Finance Minister Dr. Thomas Isaac, and K.M. Abraham, the CEO of KIIFB, who has publicly dismissed these assertions as “factually incorrect and legally misplaced.”

In a comprehensive response issued by Abraham, it was stated that the funds from the ₹2,150 crore Masala Bond—the first sub-sovereign offshore bond from India listed on the London Stock Exchange—were utilized strictly in accordance with the RBI’s guidelines on External Commercial Borrowing.

“Merely ₹66 crore was allocated for land acquisition, all of which was directed towards public infrastructure projects, not for speculative or commercial real estate developments,” Abraham emphasized in his remarks.

The statement accused the ED of relying on manipulated or erroneous data, neglecting existing documents that had already been submitted to the investigators.

KIIFB asserted that all records concerning fund deployment, monthly certifications, and audited statements have been provided to the RBI and ED, and that no violations have ever been indicated by auditors.

Accusing the agency of strategically timing its actions around election periods, KIIFB highlighted previous notices that were issued just prior to the 2021 Assembly and 2024 Lok Sabha elections.

The CEO also expressed concern over the “selective media leaks” of confidential notices shortly after their issuance, labeling them as attempts to sway public perception.

KIIFB pointed out that the ED’s adjudication process is ongoing despite a pending writ in the Kerala High Court challenging the agency’s authority regarding the Masala Bond investigation.

Reiterating its stance, KIIFB announced its intention to submit a detailed legal rebuttal against all allegations while emphasizing its transparent track record in financing over ₹60,000 crore in infrastructure projects across healthcare, education, transport, and industrial development.

“The allocation of Masala Bond proceeds has been entirely legitimate, thoroughly audited, and aimed at advancing Kerala’s infrastructure,” Abraham concluded, reaffirming KIIFB's commitment to defending its integrity through the appropriate legal channels.

On Monday, reports emerged that the ED had issued a notice, which was quickly seized upon by top Congress leaders.

Leader of Opposition V.D. Satheesan claimed that they had previously alerted the public about the “mystery-laden transaction,” accusing the government of borrowing ₹2,150 crore from international markets at a high interest rate of 9.723 percent, leading to a total repayment of ₹3,195 crore within just five years—resulting in an interest burden of ₹1,045 crore.

“This is highly irregular. Nearly half of the principal amount was lost to interest. Instead of utilizing the state’s sovereign guarantee, which could have secured funding at a minimal 1.5 percent interest rate, the government chose exorbitant rates,” he stated.

Satheesan further alleged that the agreement breached Article 293(1) of the Constitution and involved CDPQ, a firm associated with SNC-Lavalin.