Kochi, Dec 5 (PTI) Kerala Chief Minister Pinarayi Vijayan on Friday termed the ED notices to him and others in connection with the KIIFB masala bonds as "ridiculous" and as a political move usually seen at the time of elections.

The Enforcement Directorate had recently issued a Rs 466-crore show cause notice under the Foreign Exchange Management Act (FEMA) to Vijayan, former finance minister Thomas Issac, and the CM's chief principal secretary K M Abraham in the KIIFB Masala Bond case.

Terming the move as "ridiculous", Vijayan said that the Kerala Infrastructure Investment Fund Board (KIIFB) was set up in 2016 to develop the basic facilities and infrastructure in the state.

"The plan was to undertake basic infrastructure development projects worth Rs 50,000 crore in five years. But, it functioned effectively and managed to undertake projects worth Rs 62,000 crore." "Till now it has undertaken projects worth over Rs 90,000 crore. It is against such an establishment that these allegations are being levelled," the CM told reporters at a press meet here.

He said that KIIFB has always functioned in accordance with the guidelines laid down by the Reserve Bank of India (RBI) and it has not done anything in contravention of those norms.

"So, it has to be seen as one of those political moves that you see around election time," Vijayan said.

Besides the upcoming local body elections, Assembly polls in the southern state are due next year.

The ED probe is related to the end use of Rs 2,000 crore raised by KIIFB through masala bonds, and its compliance with the FEMA norms.

KIIFB is the primary agency of the state government for financing large and critical infrastructure projects.

It had raised Rs 2,150 crore in 2019 through its debut masala bond issue as part of its plan to mobilise Rs 50,000 crore to fund large and critical infrastructure projects in the state. PTI HMP SA

KIIFB masala bonds probe questions FEMA compliance over end use of funds amid political criticism. The legal issue is whether KIIFB's issuance of masala bonds and the end use of proceeds complied with the Foreign Exchange Management Act and central bank guidelines; the Enforcement Directorate's show-cause notice alleges FEMA non-compliance concerning application of funds, while KIIFB and state officials maintain the bonds and expenditures followed prescribed regulatory procedures for state infrastructure financing.