Nothing illegal in KIIFB masala bond deal, ED acting as BJP’s weapon: Thomas Isaac

Thiruvananthapuram: Former Finance Minister Thomas Isaac on Monday criticised the Directorate of Enforcement (ED) for issuing show-cause notices to him, Chief Minister Pinarayi Vijayan, and KIIFB CEO K M  Abraham in the KIIFB masala bond case. He termed the move a BJP gimmick ahead of the local body elections in the state.

Addressing the media, Isaac said there was nothing illegal in the issue of masala bonds, asserting that all procedures were carried out in accordance with RBI norms. “In the show-cause notice, the ED asked us to give our explanation before the adjudicating authority. The notice alleges that ₹2,150 crore raised through the masala bond issue was illegally used for infrastructure development. A portion of the funds was utilised only to acquire land for a KIIFB project. As per the rules, masala bond funds should not be used for land purchase. We did not do that — we only acquired land. However, the RBI restriction on land purchase was not in force when we issued the masala bond,” Isaac told the media.

He said he had approached the Kerala High Court, questioning the ED probe, after he was summoned for interrogation in 2024.

“I was asked to submit KIIFB documents and my bank account details. They also directed me to produce the bank transaction details of my family members. I didn’t understand what they were trying to prove with these documents. I approached the Kerala High Court questioning the probe against me,” he said.

Isaac noted that the Kerala High Court had restricted the ED from issuing a summons to him during the 2024 Lok Sabha elections. Though the probe came to a halt following the order, the central agency submitted its charge-sheet before the adjudicating authority in New Delhi last week. The show-cause notices were subsequently issued to Isaac, Punarayi Vijayan and KM Abraham.

“The ED only wants to create a political sensation during the local body elections. This is part of the BJP’s conspiracy. I am saddened that UDF leaders have also fallen for this trick. The people of Kerala will reject these allegations. The BJP is obstructing Kerala’s development through such moves,” he said.

The former minister added that the BJP would face a poll debacle in the upcoming elections, as people would see through its political strategies using the ED.