Thiruvananthapuram: From exposing the Sahara scam to drafting legislation for Kerala’s financial backbone, the Kerala Infrastructure Investment Fund Board (KIIFB), and pushing through academic autonomy for state-run colleges, former civil servant K.M. Abraham has many professional achievements under his belt.
In an unusual move, he was even granted cabinet status seven years after his official retirement when he became the chief minister’s chief principal secretary in 2021. And in his late 50s, while most civil servants slow down, Abraham was busy learning business finance and even Taekwondo.
Now, Abraham finds himself making headlines again—but it has nothing to do with his résumé.
On 11 April, the Kerala High Court directed the Central Bureau of Investigation (CBI) to probe a disproportionate assets case against Abraham, also the CEO of KIIFB.
The High Court order was based on a petition filed by activist Jomon Puthenpurakkal, who alleged that Abraham had amassed wealth beyond his known sources of income during his tenure as Kerala’s additional chief secretary of the finance department in 2015.
Abraham said it was a case of personal vendetta.
However, two days after the CBI launched the probe, the Supreme Court stayed the High Court order. Abraham alleged in a plea that the proceedings were started without the necessary sanctions from the state government.
Who exactly is K. M. Abraham? ThePrint spoke to officials associated with the state’s bureaucracy to find out more about the man who is said to have made both powerful enemies and strong patrons.
“There are only a few bureaucrats who are as hard-working as he is. He dedicates so much time to his work. He doesn’t devote enough time to family,” a retired IAS official told ThePrint.
The official, a contemporary of Abraham, said officials like him, “upright” and “with integrity”, are rare.
Other officials too said Abraham’s tenure is mostly considered “upright” among the state’s bureaucracy.
Abraham, who worked in key departments including finance and higher education, retired as the state’s chief secretary in 2017. Post retirement, he was appointed the chief minister’s chief principal secretary and was given cabinet status in February last year.
The official said the cabinet status was given to Abraham because of his contribution to the state’s administrative system and not because of the chief minister’s interests.
“Till he became the chief secretary, the CM never liked him, even during his tenure as the finance secretary or as an individual. He (Abraham) never compromised on his principles. But once he became the CS, the CM understood how he manages and works for the state,” she said.
However, Abraham is also not new to controversy.
In 2016, based on Puthanpurakkal’s complaint, the Vigilance and Anti-Corruption Bureau (VACB) launched a probe into Abraham in a disproportionate assets case.
However, Abraham alleged personal vendetta by now retired IPS official Thomas Jacob, who was then director of the VACB. The chief minister and then finance minister Thomas Isaac backed Abraham. Vigilance closed the case in 2017.
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Not your typical pen-pushing civil servant
A 1982-batch IAS official, Abraham is also known in the state for his academic pursuits. He has a B.Tech in civil engineering and an M.Tech from IIT Kanpur. He also has a doctorate from the University of Michigan and is a Licensed Financial Analyst (LIFA). In 2016, he got his second-degree black belt in Taekwondo.
Abraham’s bureaucratic career began as a sub-collector in Kollam, Ernakulam and Thiruvananthapuram, after which he served as the district collector of Ernakulam and Alappuzha.
However, he is best known for his policy-making decisions as finance secretary between 1996 and 2002, where he earned a reputation for being the mastermind behind the ambitious Modernising Government Programme (MGP), which aimed to restructure Kerala’s administrative machinery.
Funded by the Asian Development Bank (ADB), the MGP was aimed at reforming the administration and finances in the state for better governance. The scheme was implemented in 2002 under the UDF’s A.K. Antony government.
According to media reports, the state government secured $250 million in funding from the ADB for the programme. However, the move drew criticism from opposition parties and activists, who argued that foreign funding could open the door to private involvement in public administration.
After much opposition, the programme was wound up in 2008.
“The programme had many positive aims in improving and strengthening the administrative system. But it didn’t get political ownership somehow. He (Abraham) was disillusioned about it,” said the retired IAS official quoted above. “The state had to wind up the programme eventually. But even today, many departments are using some components of the initiatives to revamp their departments without using the tag of MGP.”
Another key initiative led by Abraham during the same period was the establishment of the KIIFB under the Kerala Infrastructure Investment Fund Act 1999 during the tenure of the Communist Party of India (Marxist)’s E.K. Nayanar.
Though the body wasn’t functional for decades, it underwent a structural overhaul in 2016 during the first Pinarayi government through an amendment that made it a powerful body functioning as the Kerala government’s key arm for large-scale infrastructure investment.
As the state’s primary arm to amass funds for large-scale infrastructural works, KIIFB used primarily debt instruments such as General Obligation Bonds, Alternative Investment Funds (AIF), Infrastructure Debt Funds (IDF), revenue bonds, land bonds and arrangements with banks or other international institutions authorised by the government to mobilise funds.
But the board came under severe criticism from the opposition in the state for becoming a state liability because it didn’t have its own sources of income.
“The results of his initiatives are quite a mixed bag. Most officers feel he is associated with several forward-looking, but equally risky, policy initiatives. If you take gross financial indicators of the state during the years he helmed state finances, one can’t see much qualitative improvement,” B. Ashok, the president of Kerala IAS officers’ association, told ThePrint.
“Many would describe it as a period when state finances generally deteriorated. KIIFB is again drawing very mixed responses. There is no unequivocal endorsement of anything he did. He is one of our better officers. Not an icon, not entirely pedestrian either.”
Kerala went through its worst financial crisis from 1998-2001 due to high revenue deficit, excessive expenditure and lack of revenue mobilisation.
Abraham’s big break outside Kerala came when he became a Whole Time Member in the country’s financial watchdog, Securities and Exchange Board of India (SEBI), in 2008 after various stints as secretary in higher education, revenue and food and civil supplies, and the personnel and administrative reforms departments.
It was during his stint at SEBI that Abraham played a crucial role in bringing the Sahara group scam to light.
His probe revealed that two companies associated with the Sahara group—Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation (SHICL)—were raising money through Optionally Fully Convertible Debentures (OFCD), but disguising it as a private placement. OFCD is a debt instrument that allows the investor to convert debentures into equity shares at a later stage.
Abraham found that the companies, while raising large amounts, didn’t keep records of investors. Though the Sahara group challenged SEBI’s findings, the Securities Appellate Tribunal (SAT) as well as the Supreme Court upheld SEBI’s findings.
A former official, who was working with the V.S. Achuthanandan government, said the decision to depute Abraham at SEBI was because of political differences Achuthanandan had with the civil servant.
“Abraham ran the MGP in the state. We understood that he just didn’t administer the programme. When there is a government change, these banks insist that the official shouldn’t be changed from the programme. A left government run by V.S. couldn’t appreciate an official like that,” the official said.
The period when Kerala was ruled by the communist leader V.S. Achuthanandan was the only time Abraham was away from the state.
The official added that the bureaucracy considered Abraham an “upright” officer but said his last lap in the bureaucracy didn’t justify his earlier principles, as he chose to stay with the state’s administration even after his tenure was over.
The current case
The latest controversy stems from allegations that Abraham acquired property, including a commercial complex in Kollam and assets in Mumbai and Thiruvananthapuram, disproportionate to his income.
Questioning the credibility of the probe by the VACB, which comes under the state’s home department where Abraham is appointed in a cabinet rank, Puthenpurakkal sought a CBI probe into the probe.
He alleged that Abraham did not disclose the source of income for the construction of a multi-storey shopping complex in Kollam district, while amassing properties worth Rs 1 crore in Thiruvananthapuram and Rs 3 crore in Mumbai. He claimed the repayment obligations for these assets exceeded Abraham’s known sources of income.
The petitioner also alleged that Abraham didn’t file his financial statements for six years before 2015 as required under the All India Service Rules, 2005.
The Kerala High Court allowed the CBI to take over the investigation, stating the investigation would retain public confidence for an impartial probe into the matter.
The civil servant alleged that Puthanpurakkal was acting out of personal animosity as he had taken action against the activist for misusing a PWD rest house in the past.
Abraham didn’t respond to ThePrint’s queries on the matter.
Amid mounting pressure to step down from his post as KIIFB CEO, Abraham also got support from the state.
While Abraham said the chief minister would decide his future, Pinarayi Vijayan said the government will take necessary measures at the appropriate time. He said the government is currently waiting as Abraham has sought legal measures to fight the probe against him.
(Edited by Sugita Katyal)