The Union government had ordered a probe against her company and the Kochi-based company to which it was offering services.
Kerala High Court. (Wikimedia)
The Kerala High Court, on Wednesday, 24 January, asked the Union government whether it intends to order a probe by the Serious Fraud Investigation Office (SFIO) into the affairs of the software firm owned by Veena Thaikandiyil.
She is the daughter of Chief Minister Pinarayi Vijayan.
The Union government had ordered a probe against her company Exalogic Solutions and a Kochi-based company to which it was offering services.
Justice Devan Ramachandran posed the query to the Union government after it filed a memo in court confirming that it has ordered an investigation — under Section 210 (investigation into affairs of company) of the Companies Act — into the two companies.
However, the Union government had not followed the direction in the court’s 15 January order to “obtain specific instructions, if any further action by the SFIO has been ordered or found warranted”.
The lawyer for the Union government told the court that the Ministry of Corporate Affairs could order an SFIO probe if it was of the opinion that the same was required.
The Union government lawyer sought time to seek instructions from the Ministry on whether an SFIO probe has been ordered or found warranted.
Meanwhile, the Cochin Minerals and Rutile Ltd (CMRL) — whose payments to Veena’s firm for services have snowballed into a political storm in the state — told the court that since the Ministry has ordered a probe under Section 210 of the Companies Act, the relief sought in the petition has been satisfied.
The CMRL’s lawyer also told the court that a query from it on whether an SFIO probe has been ordered might “push” the Ministry to issue such a direction.
The court was hearing a plea by Shone George, a lawyer and son of veteran politician PC George, seeking an investigation into affairs of CMRL and Veena’s company under the Companies Act and also by the Serious Fraud Investigation Office (SFIO).
Tightening the grip on Veena, who is also the wife of Kerala’s Tourism and Public Works Minister PA Mohamed 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 from the Ministry of Corporate Affairs when contacted by South First earlier.
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.”
Despite CPI(M) state secretary MV Govindan claiming that 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.
A controversy erupted in Kerala after the Malayalam daily Malayala Manorama reported last year that CMRL had paid a total of ₹1.72 crore to Veena, the Chief Minister’s daughter, between 2017 and 2020.
The news report cited the ruling of an interim board for settlement and said that CMRL previously had an agreement with Veena’s IT firm for consultancy and software support services.
It also alleged that although no service was rendered by her firm, the amount was paid on a monthly basis “due to her relationship with a prominent person”.
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.
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.
(With PTI inputs)
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