The Enforcement Directorate (ED) has issued a show-cause notice under the Foreign Exchange
Management Act (FEMA) to Kerala Chief Minister Pinarayi Vijayan, his personal secretary, and
former finance minister Thomas Issac. The notice is related to allegations of foreign
exchange rule violations connected to the state government’s 2019 masala bond raising.
According to officials, the notice involves transactions worth ₹468 crore. The ED has
asked the leaders to explain why action should not be taken against them for these alleged
violations.
Masala bonds are a type of financial instrument issued by Indian organisations in other
countries. Unlike regular international bonds, these are rupee-denominated, meaning the
bonds are issued in Indian rupees instead of foreign currencies like the US dollar.
Kerala had raised money through such bonds in 2019 for development projects.
The ED’s notice has now brought the bond issue under further scrutiny, and the involved
leaders are expected to respond with their explanations soon.