Thiruvananthapuram: Nearly six years, multiple court dates and a long political battle later, the CMRL-Exalogic case, allegedly involving fraudulent payments to a firm owned by Kerala Chief Minister Pinarayi Vijayan’s daughter Veena T., came to a standstill when the Kerala High Court stayed further proceedings in April.
However, the matter continues to be a political hot potato with the opposition United Democratic Front (UDF) repeatedly alleging that the crawling probe reflects an alleged nexus between the ruling Left Democratic Front (LDF) and the BJP-led Centre, and the state BJP in turn alleging that LDF is trying to stall the probe until after assembly elections next year.
The alleged fraud involves Kochi-based Cochin Minerals and Rutile Ltd (CMRL) and Exalogic Solutions, the now-defunct IT firm owned by Veena, who is also the wife of state Tourism Minister Mohamed Riyas. According to the Serious Fraud Investigation Office (SFIO), Veena and her firm allegedly received illegal payments of Rs 2.7 crore from CMRL without rendering any services. She has denied the allegations.
The case came to the fore in 2019 with an Income Tax Department search at CMRL’s premises. The Kerala High Court’s status quo order this April came soon after the Ernakulam Sessions Court took cognisance of the SFIO charge sheet.
However, the High Court and the Supreme Court continue to receive multiple petitions seeking a Central Bureau of Investigation (CBI) probe. Two high court division benches have recused themselves from hearing the petitions.
Congress MLA and KPCC functionary Mathew Kuzhalnadan, who approached both courts seeking a CBI probe, said the response from the judiciary was disappointing. “The Income Tax Department is a central government agency. It’s the IT body’s report that said the case needs to be probed under the Prevention of Corruption Act. When there is an official statement from a body like that, why is there no suo motu case by the ED or CBI?”
Kuzhalnadan said he is waiting to see the SFIO probe as well as the outcome of a pending PIL seeking a CBI investigation to decide his next course of action. “I tried my best, but if the whole system doesn’t feel such things need correction, I can’t take it alone. I don’t have personal vengeance,” he said.
Meanwhile, the state BJP has denied the UDF’s charges of an LDF-Centre nexus. Shone George, the state BJP leader who approached the court seeking a CBI probe in September, said neither he nor the BJP wants to take up the issue politically and make allegations in the run-up to polls, and only plan to take it legally.
“The BJP never asked me to not take up the case. But the party or the central government is not taking any fast decisions like how it happened for Kejriwal. We only want to move legally without involving politics in it,” he said.
He added that the chief minister and the state government have been halting central government initiatives and that the Congress’s allegation is baseless.
George further said that the SFIO report states there were illegal transactions, which will only become clearer if the CBI conducts a probe based on the report. He said the BJP-led central government is supporting him in the case.
ThePrint reached multiple CPI(M) leaders, who refused to comment on the matter. ThePrint also contacted Senior Advocate Vijay Bhanu, who represented CMRL and Exalogic in the high court, who said he had forgotten the details. In April this year, both Pinarayi as well as CPI(M) state secretary M.V. Govindan had said the probe was a political conspiracy. The Kerala CM had also said that the transactions between the firms were legal and taxes were paid.
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The case
The case goes back to 2019, when an IT Department raid found that CMRL had allegedly bribed many politicians in the state and inflated its expenditure.
The raid revealed that the company, the only listed firm in India manufacturing synthetic rutile, had entered into a contract with Bengaluru-based Exalogic Solutions in 2017. It showed that the company allegedly continued to make payments without specifying any services.
Later in 2023, the New Delhi bench of the Income Tax Interim Settlement Board issued an order stating that no software support or services were being rendered by Exalogic Solutions and that the transactions between the two firms were illegal.
By the end of the year, many PILs were filed in the Kerala High Court seeking a CBI probe. In January last year, the Union Ministry of Corporate Affairs ordered a six-member SFIO investigation.
Though Exalogic, CMRL and Kerala State Industrial Development Corporation (KSIDC) challenged the probe in the Kerala High Court, their plea was dismissed. Around the same time, Exalogic Solutions moved the Karnataka High Court to stall the probe.
In April this year, the Ernakulam Additional Sessions Court took cognisance of the SFIO report. The court found prima facie offences in the SFIO’s charges and said there was enough ground to issue summons to all 11 accused, including Veena T.
According to the chargesheet summary filed by the SFIO, accessed by ThePrint, the probe found fraudulent payments of Rs 2.7 crore benefitting Veena and Exalogic.
Charges were invoked under the Companies Act, 2013, including Section 447 dealing with fraud, Section 448 (false statements), and Sections 129 and 134 (violations related to financial statements and the board’s report).
However, the Kerala High Court, that same month, directed a two-month status quo on a plea filed by CMRL challenging the sessions court’s decision to take cognisance without a pre-cognisance hearing. The stay, originally ordered for two months, was extended for four months on 23 September.
The high court in March dismissed a petition by the Congress’s Muvattupuzha MLA, seeking a probe against Pinarayi in connection with the case.
Similarly, the BJP’s Shone George approached the Kerala High Court seeking SFIO complaints but failed. Journalist M.R. Ajayan also approached the high court seeking a CBI probe, with two benches earlier recusing themselves from hearing it.
(Edited by Sugita Katyal)