The CPI(M) said they did not take up the controversy in the Assembly since they were fearful of the reply by the CM in the House.
Kerala Chief Minister Pinarayi Vijayan. (Pinarayi Vijayan/ Twitter)
The Kerala ruling CPI(M) on Friday, 11 August, took a dig at the Opposition UDF saying they did not take up the controversy involving Chief Minister Pinarayi Vijayan’s daughter in the Assembly since they were fearful of the reply by the chief minister in the House.
This comes a day after the Opposition UDF faced flak for not raising the row in the Assembly.
The Marxist party also claimed that Vijayan’s daughter Veena Vijayan had not done anything illegal and all the dealings of her IT firm were transparent.
Meanwhile, the Congress on Wednesday questioned why Public Works Minister PA Mohammed Riyas — husband of Veena — had not disclosed its details in his election affidavit if the dealings were transparent and legal.
Strongly defending Veena, senior CPI(M) leader and the party’s Central Committee member AK Balan said money laundering allegation on part of her financial transactions with a private minerals company would not stand as all the dealings were through banks.
Veena had not done anything out of the contract signed between her IT firm and the Kochi-based Cochin Minerals and Rutile Limited (CMRL), he further said.
Attacking the Congress, which had earlier demanded a judicial probe into the allegation, he asked why the party-led Opposition front did not raise the matter in the Assembly.
If the Opposition really wanted to raise the issue in the House, they could have brought it as an adjournment motion, he said.
“But a section of its leaders lost their sleep thinking about the reply to be given by the chief minister in the Assembly against their notice for motion. That’s why they didn’t raise the matter,” Balan told reporters.
The senior leader also rejected the Congress’s claim that there were technical issues in raising a corruption issue on the floor of the House as an adjournment motion.
If they had given in writing the corruption charges, the Speaker could not have denied their demand, he added.
However, the Congress dragged Riyas into the row, asking why he had not disclosed its details in his election affidavit if the dealings were transparent and legal.
The Opposition party also urged the CPI(M) to make it clear whether Veena had not accepted the money from a Kochi-based minerals company or whether the affidavit filed by Riyas was wrong.
The Congress came out with the questions a day after it adopted a soft stand on the issue and opted not to raise the controversial matter in the Assembly, citing technical reasons.
Hitting hard at the ruling party, Congress legislator Mathew Kuzhalnadan produced a handful of documents, including a copy of the affidavit submitted by Riyas, in a press meet held at the KPCC headquarters.
The Congress MLA referred to the statement issued by the CPI(M) state secretariat on Thursday, claiming that the dealings between Veena’s IT firm and the minerals’ company were transparent.
“So, my question is not to Veena. I don’t want to drag her into it. As the CPI(M) secretariat has taken over the matter, extending her complete support, my question is to them. If the financial transaction between the duo was transparent, why was that amount not disclosed in the affidavit (of Riyas)? Please explain,” he said.
Though Kuzhalnadan tried to refer to the controversial matter in the House on Thursday during his speech, the Speaker intervened suddenly and didn’t allow him to speak further.
The MLA said neither the Marxist party nor the chief minister should think that he would keep quiet if he was denied a microphone to speak in the House or attempted to scare him.
He also came down heavily on AK Balan, who said that the Opposition didn’t raise the controversy in the Assembly as they were scared of the reply by the chief minister.
“In the past, the Marxist party was scared of only people. But, now the entire party is scared of an individual, and that is Pinarayi Vijayan,” he said.
Balan is scared of the chief minister, and his statement against the Opposition reflected his fearful mindset, the MLA added.
Besides the Congress, the BJP also urged the CPI(M) to explain why the controversial amount had not been shown in the affidavit submitted by Riyas. Neither the minister or the CPI(M) have reacted to the fresh allegations.
BJP state chief K Surendran urged Vijayan to break his silence and give a reply to the allegations that cropped up against him and his family.
He also sought to know why the Vigilance department and the Lok Ayukta did not intervene in the issue days after it came out in the public domain.
A controversy erupted in Kerala recently over some financial transactions between a private minerals company and Chief Minister Vijayan’s daughter T Veena and her IT firm.
Evidence has also cropped up that showed that the company had dealings with top leaders of both the ruling CPI(M) as well as the opposition Congress-led UDF.
The issue came to the fore after a Malayalam daily reported that CMRL paid a total of ₹1.72 crore to the chief minister’s daughter between 2017 and 2020.
The news report, citing the recent ruling of an Interim Board for Settlement, said that the Kochi-based company previously had an agreement with Veena’s IT firm for consultancy and software support services.
Despite the fact that no service was rendered by her firm, the amount was paid on a monthly basis due to her relationship with a “prominent person”, the report said, citing the deposition of the minerals company authorities before the Income Tax Department.
As the report snowballed into a political row, the BJP attacked Chief Minister Vijayan and urged him to break his silence over the allegations cropping up against his daughter.
The Congress, however, went soft on the matter, prompting the saffron party to question the grand old party for not raising it in the ongoing Assembly session.
Leader of Opposition in the assembly VD Satheesan rejected the criticism by saying that even if the Opposition had given a notice for adjournment over the issue, the chief minister would not have replied.
However, the ruling CPI(M) categorically rubbished the charges and claimed that the report was totally baseless and that Veena received the amount as per the legally valid contract between her IT firm and the minerals company.
According to I-T Department sources, CMRL had shown the amount as genuine business expenditure to avail of an input tax credit. CMRL is an Aluva-based public limited company that deals in synthetic rutile — which is used primarily as a pigment.
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 was also alleged that the company was pally with governments to act against environmentalists and other activists who voiced their concerns over the illegal mining of mineral sand.
Veena’s husband PA Mohammed Riyas holds the public works and tourism portfolios in the Pinarayi Vijayan Cabinet.
I-T sources said CMRL had been inflating its expenditure since 2019. It paid huge amounts to several individuals, including politicians and media houses, in the state.
The amount thus paid would come to ₹1,34.27 crore. However, sources said the payment shown in the records could be bogus.
Going by the notes made by the principal commissioner of Income Tax, 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 retainership basis with effect from 1 January, 2017.
It also said she would be paid a consolidated sum of ₹5 lakh per month for her services.
Veena and her company, Exalogic Solutions, also 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 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 and Chief General Manager (CGM) and Secretary P Suresh Kumar gave statements to investigators in January 2019 that they were yet 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, or any software maintenance or consultancy or any other form of services 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.
The discrepancies were found in the assessment years 2017-18 to 2019-20.
“The department has demonstrated with clinching evidence that the applicant has made payments through banking channels to persons connected with a prominent person and thereby claim it as a deductible expense and claiming to compensate a service which has not been rendered or received,” the ruling said.
Of the total ₹1.72 crore, Veena received ₹55 lakh, while Exalogic received ₹1.17 crore.
The company’s MD, CFO, and other officials later tried to withdraw their statements through an affidavit, but the I-T Department stood firm on its findings that the money paid to Veena was illegal as there was no evidence for services rendered.
Multiple Interim Boards for Settlement (IBSes) were created in 2021 through the amendment of the Finance Act 2021 to settle I-T disputes after abolishing the Settlement Commission.
There are three such boards in Delhi, and the decision on disputes raised by CMRL for the assessment year 2019-20 was settled by the IBS– II bench, which has Amrapalli Das, Rameswar Singh and M Jagadish Babu as its members.
The I-T Department inspected the offices of the CMRL and the residences of the board of directors on tax evasion charges in January 2019. Kartha’s residence was also searched.
The IBSes are governed by Section 245AA of the Income Tax Act. Their decision is final, and there is no provision for appeal.
The boards consider the settlement application filed by an individual or entity accused of tax evasion. The I-T Department raises arguments as an opposing party. The applications are disposed of based on evidence.
(With PTI inputs)
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