Kerala CM Pinarayi Vijayan’s daughter Veena and her firm — what is the Union ministry probing?

Veena Vijayan with her father Pinarayi Vijayan, husband Mohammed Riyas and mother Kamala Vijayan. Photo: Facebook.

Tightening the grip on Veena, who is also the wife of Kerala’s Tourism and Public Works Minister PA Muhammed Riyas, the ministry has asked the Registrar of Companies (ROC) in Bengaluru to initiate a probe against her.

This came after the Bengaluru ROC wrote to the MCA that the financial dealings between Kochi-based mineral sand processing firm Cochin Minerals and Rutile Limited (CMRL) and Veena’s software company would fall under the Prevention of Money Laundering Act of 2002.

The ROC also recommended investigations into the dealings by central investigation agencies like the Enforcement Directorate (ED) and the CBI.

The ROC pointed out that Exalogic failed to provide documents supporting its claim that it accepted money in return for services rendered to CMRL.

It may be noted that the public-sector Kerala State Industrial Development Corporation (KSIDC) holds a 13.4 percent stake in CMRL.

The ROC report stated that based on the preliminary investigation, it appeared that both firms committed offences that would invite jail terms and penalties under the Companies Act.

“There is non-cooperation on the part of Exalogic, and it even refuses to respond to our queries. So, we have sought an in-depth investigation, and the Union government has agreed to it. Three officials, including the Bengaluru deputy ROC, will probe Exalogic, CMRL, and KSIDC,” said an official of the ministry when contacted by South First.

The investigation order quotes the report given by the Ernakulam ROC, which was submitted to the Union government.

According to this report, “It emerged that either CMRL’s responses to the allegations are evasive and vague in nature or Kerala State Industrial Development Corporation has not provided a response regarding the notices issued by the registrar of companies based on the complaints.”

Also read: Stifling the media in Kerala, Pinarayi Vijayan style

Political push-and-pull

Despite CPI(M) state secretary MV Govindan claiming the move — unfolding just ahead of the Lok Sabha election — was politically motivated, neither Vijayan nor his daughter clarified their stands on the issue.

In the case of Riyas, he evaded questions from the media by saying that the party would respond to the move.

He also said he was expecting more such attempts by the central investigation agencies as the Lok Sabha election was around the corner.

Till recently, Vijayan never tolerated anyone levelling charges against his family, especially his lone daughter, who seems to hit the headlines always for the wrong reasons.

Meanwhile, the Congress-led Opposition alliance UDF in Kerala is alleging that the money was paid to Veena and her company as a reward for undue favours done for CMRL by the state government under Vijayan.

Congress MLA Mathew Kuzhalnadan, who moved the privilege motion against Pinarayai Vijayan. Photo by S K Mohan.

While raising the issue in the Kerala Assembly, Congress leader Mathew Kuzhalnadan alleged that the chief minister’s daughter didn’t even pay the GST for her company.

He also approached the Vigilance Department seeking a probe against Veena over the alleged bribes.

“Central agencies like the ED and the CBI are conducting an inquiry with clear political motives ahead of the general elections. The probe against Veena is part of the resolve of the BJP to defame Vijayan ahead of the election,” said Govindan when contacted by South First.

“In response to Kuzhalnadan’s complaint, a vigilance court ruled that there was no corruption in the Exalogic deal. The high court did not notify Vijayan or his daughter while considering the revision petition. Exalogic has submitted all the documents sought by the ROC. The ROC has no authority to examine whether Exalogic has provided services,” said CPI(M) central committee member AK Balan.

Also read: CPI(M) tells Kuzhalnadan to apologise for allegations against Veena

Veena’s violations

Veena is already facing the charge of committing financial fraud involving CMRL for over a year, with the Income Tax (I-T) Interim Settlement Board ruling that the private company paid Exalogic Solutions ₹1.72 crore between 2017 and 2020.

The agency observed that despite the money being accepted, no service was rendered to CMRL.

Meanwhile, sources in the MCA said it was an illegal transaction and that a probe would be conducted under a joint director at the Office of the Director General of Corporate Affairs in Bengaluru.

Initial investigations by the ministry found that Veena had obtained dormant status for her IT company by suppressing details on the pending proceedings with the Registrar of Companies.

Pinarayi Vijayan, wife, daughter Veena and grandson at the Karl Marx tomb in Highgate Cemetery in London. (File photo/CMO, Kerala)

According to ROC officials, Veena violated Section 448 of the Companies Act, which, if proven, could result in imprisonment and a penalty.

According to the officials, the developments started in 2020 after the ROC received a complaint against Exalogic Solutions and Veena alleging that crores of rupees were paid illegally from CMRL.

Then, Bengaluru ROC DS Varun summoned Veena after starting the probe.

As the probe progressed, Veena applied in November 2022 for dormant status without revealing the pending proceedings against the company.

Officials said this was a clear violation of the Companies Act.

As per the findings of the interim settlement board, CMRL allegedly paid ₹71 lakh to Exalogic and ₹55 lakh to Veena personally between 2017 and 2019.

The board found that the government-owned corporation’s role was significant in appointing key management personnel to CMRL.

According to the ROC, Exalogic Services Private Limited is a private firm (a one-person company) founded on 19 September, 2014, by Veena with an authorised share capital of ₹1 lakh.

It is believed to be into software solutions. The company’s registered address is in Bengaluru.

The MCA reportedly possesses a statement from key CMRL management personnel to the I-T Department admitting that money was paid to Veena without service.

The initial probe also found that the auditor still needed to sign the 2021-22 audit report filed by CMRL.

Also read: Kerala Guv says allegations against CM’s daughter require probe

CMRL’s quagmire

In the meantime, Kochi-based CMRL, promoted by controversial businessmen SN Sasidharan Kartha and Mathew M Cherian, has been accused of illegally mining mineral sand from the southern coasts of Kerala to segregate and export synthetic rutile.

It has also been alleged that the company was paying successive regimes to act against environmentalists and other activists who voiced their concerns over the illegal mining of mineral sand.

I-T sources say CMRL has been inflating its expenditure since 2019. The state allegedly paid huge amounts to several individuals, including politicians and media houses, to avoid opposition to its illegal mining operations.

Going by the notes made by the principal commissioner of I-T, CMRL issued a letter to Veena on 20 December, 2016, saying the company was “pleased to engage” her as its IT and marketing consultant on a retainer basis from 1 January, 2017.

It also said she would be paid a consolidated sum of ₹5 lakh per month for her services.

Veena and  Exalogic then signed an agreement with CMRL on 2 March, 2017. As per the agreement, Exalogic was to provide services of “development, maintenance, and management of software for the daily business and operation of CMRL’s corporate office and factory located in Aluva”.

The agreement also mentioned that the service provider was entitled to a monthly remuneration of ₹3 lakh.

However, the company’s Chief Financial Officer (CFO) KS Suresh Kumar, chief general manager (CGM), and Secretary P Suresh Kumar told investigators in January 2019 that they were still waiting to see any software developed by Exalogic.

CMRL MD Kartha, in a sworn statement to the I-T Department, said, “Both these vendors (Veena Vijayan and Exalogic) have not provided any work, services, software maintenance, consultancy, or any other form of service to our expectations till date. However, monthly payments are being made as per the agreements.”

Although the transactions were made through banks and such payments for business expenses were permissible, the board ruled that the transactions to Veena and Exalogic were “illegal” as no services were rendered.

Veena has faced charges of financial misappropriation in the past as well. She was accused of accepting favours to protect the accused in the sensational diplomatic-channel gold-smuggling case that rocked Kerala.