Kochi, March 19 The Kerala High Court has extended its stay on any proceedings related to the show cause notice issued to Chief Minister Pinarayi Vijayan by the Enforcement Directorate (ED) concerning the KIIFB masala bonds issue until April 6.
Justice Bechu Kurian Thomas granted the same interim relief to former state finance minister Thomas Isaac and Vijayan's Chief Principal Secretary and KIIFB CEO, K M Abraham.
The matter will be taken up again on April 6.
The court had previously stayed further proceedings on the show cause notice for three months, starting December 18, 2025.
The interim order was based on a joint plea filed by Vijayan, Isaac, and Abraham, seeking to quash the Enforcement Directorate (ED) show cause notices issued to them in November last year, concerning the use of funds from the Kerala Infrastructure Investment Fund Board (KIIFB) for acquiring land for infrastructure projects.
A single judge bench of the High Court had observed on December 16, 2025, that according to the Reserve Bank of India's (RBI) External Commercial Borrowings (ECB) framework, which came into effect on January 16, 2019, and governed the masala bonds, the definition of real estate activity does not include activities related to the infrastructure sector.
However, according to the central probe agency, the acquisition of land for infrastructure projects constituted real estate activity and could not be carried out using masala bond funds.
The ED had issued a Rs 467-crore show cause notice to Vijayan, Isaac, and Abraham in the KIIFB masala bond case in November, alleging a violation of the Foreign Exchange Management Act (FEMA) provisions and the RBI's master direction, amounting to Rs 466.91 crore.
The notice pertains to the alleged violation of FEMA provisions and the RBI's master direction by KIIFB and its authorities, amounting to Rs 466.91 crore.
KIIFB is the primary agency of the state government for financing large and critical infrastructure projects. It raised Rs 2,150 crore in 2019 through its debut masala bond issue as part of its plan to mobilize Rs 50,000 crore to fund large and critical infrastructure projects in the state.
