News reports of SFIO questioning Kerala CM’s daughter Veena Vijayan, in Chennai roils Kerala politics

The Union Ministry of Corporate Affairs ordered the SFIO probe against Ms Veena’s firm on suspicion of illegality in the transactions between CMRL and Exalogic.

A headline-hogging report that the Serious Fraud Investigation Office (SFIO) in Chennai had recorded the statement of Chief Minister Pinarayi Vijayan’s daughter and owner of a now-dormant IT consultancy last week, Veena Vijayan, dominated television chyrons and elicited sharp reactions from either side of the political aisle in Kerala on Sunday (October 13, 2024).

Kerala Pradesh Congress Committee (KPCC) president K. Sudhakaran told reporters that nothing would come of the SFIO probe, given the Communist Party of India (Marxist) ‘s [CPI(M)] “tacit” understanding with the Bharatiya Janata Party’s (BJP) national leadership.

He termed the “SFIO summons” to Ms. Veena an eyewash to pull the wool over the public’s eye. He termed the development a high-level political subterfuge orchestrated to occult the CPI(M)-BJP “symbiotic association” in Kerala.

CPI(M) State committee member K. Anil Kumar said that Cochin Minerals and Rutile Limited (CMRL), a private firm in which the State-owned Kerala State Industrial Development Corporation (KSIDC) has a 14 percent stake, had hired Ms Veeena’s firm Exalogic on a retainer fee as an IT consultant. 

Mr Anil Kumar said the contract was above board, and the firms transacted through bank accounts. Ms Veena had paid her taxes and submitted the requisite documents to various regulatory agents. 

He said the recording of Ms Veena’s statement if at all, was procedural and not inculpatory, as the Congress and BJP portrayed it. Prime Minister Narendra Modi and Finance Minister Nirmala Seetharaman’s political sabre rattling would not pass muster in a court of law or among voters,” he added.

He said the opposition parties, in conjunction with the right-wing media, were making a mountain out of a molehill to denigrate Mr Vijayan and the government in the run-up to the critical by-elections in the Chelakkara and Palakkad Assembly constituencies and the Wayanad Lok Sabha segment. 

BJP’s national vice president Abdullahkutty said the law was knocking at Chief Pinarayi Vijayan and his family’s door, and it would take its course.

MCA probe

The Union Ministry of Corporate Affairs (MCA) ordered the SFIO probe against Ms Veena’s firm on suspicion of illegality in the transactions between CMRL and Exalogic. 

The politically sensitive enquiry has its provenance in the controversial 2023 finding of the Interim Board for Settlement (IBS) under the Central Board of Taxes. 

Interim Board

Without notifying Ms Veena, the forum concluded that Exalogic, which received a sizeable retainer from CMFRL during 2017-2021, had rendered no tangible service, raising the suspicion that the payments were a political payoff.

ED enquiry

Consequently, the Enforcement Directorate initiated an anti-money-laundering enquiry against Exalogic and CMFRL on the grounds the companies failed to make a genuine case before the IBS, a statutory body with regulatory powers. 

In February 2024, the Karnataka High Court rejected Ms Veena’s contention that the MCA had no legal ground to order an SFIO probe into Exalogic’s transactions.

CM’s statement 

In September 2023, Mr Vijayan sought to put the controversy to rest by making a statement as per Rule 285 in the Kerala Legislative Assembly to counter the accusations raised against Ms Veena by Congress legislator Mathew Kuzhalnadan. 

Without naming Ms Veena, Mr Vijayan said the firm had entered into a legitimate contract to provide consultancy service to a Kochi-based mining firm. He said an Income Tax (I-T) disputes settlement board in New Delhi had disallowed the mining firm from claiming input tax credit for its payments to the consultancy firm.

The Chief Minister noted that three Central government officials populated the board. They had yet to hear the company’s version. Moreover, Mr Vijayan said, the order should be seen against the backdrop of the Central government’s subversion of constitutional agencies to target and defame political opponents.

Published - October 13, 2024 01:43 pm IST