The Enforcement Directorate (ED) has initiated a probe into alleged illegal payments made by a Kochi-based minerals firm to the daughter of Kerala chief minister Pinarayi Vijayan and the software consulting firm owned by her, an official familiar with the matter said.
The federal agency’s Kochi unit has filed an Enforcement Case Investigation Report (ECIR) under the Prevention of Money Laundering Act, 2002 (PMLA) to investigate the nature of the payments to the tune of ₹1.72 crore made by Cochin Minerals and Rutile Limited (CMRL) to Veena T, daughter of the Kerala CM, and Exalogic Solutions Private Limited, the firm she owned, over a three year period.
An ED official familiar with the matter said: “We have registered a case and an investigation is underway.”
The agency is likely to issue notices to Veena, officials of Exalogic and CMRL as well as Kerala State Industrial Development Corporation (KSIDC), which has a 13.4% stake in CMRL, in connection with the case.
While the office of the chief minister did not respond to queries, the ruling CPI(M) charged that investigative agencies such as ED are being used for political gains and collecting money.
“There is no need to give so much importance to ED. They can target anyone politically. (ED officials) are working as daily wage labourers for the BJP. We or the people of Kerala will not succumb to them,” said CPI (M)’s Kerala unit secretary MV Govindan.
Leader of the Opposition VD Satheesan, of the Congress termed ED’s move an “election stunt”.
“The ED has registered so many other cases before as well. Where have the probes into the Karuvannur bank fraud, Life Mission bribery case and the gold smuggling case reached? When they reach Kerala, their methods change. This is a stunt (by BJP) to show that they are not with the CPM,” he said.
BJP leader V Muraleedharan said, “Those who play the victim card like the CM and his daughter must explain how they got the money even though they did not render any services. The people of Kerala are waiting for their explanation. Those who commit the crimes will be punished.”
The BJP’s rivals have accused the party of weaponizing central agencies such as ED and the Central Bureau of Investigation to target political opponents. They point to the recent arrests of Jharkhand’s former CM, Hemant Soren of the JMM, and Delhi’s CM, Arvind Kejriwal of the AAP.
In this case, ED’s action comes even as the Special Fraud Investigation Office (SFIO) under the Ministry of Corporate Affairs has been probing alleged financial irregularities of Exalogic as well as CMRL, which also reportedly paid ₹135 crore to various political parties. The Karnataka High Court upheld the validity of the SFIO probe in February this year.
The allegations against Veena came to the fore in July last year after the New Delhi bench of the Income Tax Interim Settlement Board ruled that CMRL, a manufacturer of synthetic rutile, made monthly payments to the tune of ₹1.72 crore to Exalogic between 2017 and 2020 despite no evidence of services being rendered by the software firm. The minerals firm signed an agreement with Exalogic in March 2017 for IT, marketing and software consulting services.
“The department has demonstrated with clinching evidence the fact that applicant has made payments through banking channels to persons connected with a prominent person and thereby claim it as a deductible expense and by claiming to compensate a service which has not been rendered or received,” the Settlement Board ruling said.
While the main opposition parties in Kerala, Congress and BJP, alleged that the payments made by CMRL to Vijayan’s daughter were kickbacks in return for favours done to the minerals firm, the chief minister has termed the allegations baseless. In January this year, the CM told the Assembly that his ‘hands were clean’.