New Delhi: A probe by the Serious Fraud Investigation Office (SFIO) into the affairs of two private firms and a state-run public sector undertaking, which has snowballed into a political storm, is likely to widen.
The inquiry order on Cochin Minerals and Rutile Ltd (CMRL), Exalogic Solutions Pvt Ltd and Kerala State Industrial Development Corp. has a “broad scope” and will look into alleged illegal payments made to political officials, influential persons, government servants and the media. , a person briefed on the investigative order said.
That order of 31 January was based on an interim report by the Registrar of Companies, Bengaluru. It referred to alleged illegal payments by CMRL, a company engaged in bringing ilmenite, to “various political functionaries and entities”. ₹135 crore was “made to influential persons, state government officials, government servants, media persons etc…” the person said, quoting from the order. The broad scope of the investigation has not been previously reported.
P. Rajeev, Kerala’s minister for law, industries and coke, told Mint that KSIDC, a state agency that promotes industrial development in the state through term loans and equity support, will respond to the allegations.
A person briefed on the workings of KSIDC told Mint on condition of anonymity, “KSIDC moved the Kerala High Court. To promote industry in the state, KSIDC has invested in more than 200 companies. Out of these, 76 companies are active now. CMRL is one of them . KSIDC does not involve itself in their day-to-day management and if a manager in any of these companies commits a breach, KSIDC has nothing to do with it. KSIDC has filed a writ petition in the Kerala High Court seeking to be excluded from the investigation.” The state agency has a 13.4% stake in CMRL.
One of the transactions that the SFIO will look into is a contract that CMRL had with Exalogic Solutions Pvt Ltd, a one-person company founded by Veena T, daughter of Kerala Chief Minister Pinarayi Vijayan. On 16 February, the Karnataka High Court rejected a petition by Exalogic Solutions challenging the SFIO probe, according to a copy of the order seen by Mint.
“The transaction between Exalogic Solutions and CMRL was an old software contract. The amount is very small, unlike cases investigated by SFIO in the past involving several crores,” a person briefed on the transaction between the two companies said on condition of anonymity.
The SFIO probe order mentions the transaction between the two companies to be of ₹1.72 crores.
Emails sent to the Chief Minister of Kerala and CMRL on 7 February and 15 February, as well as to the spokesperson for the Union finance and corporate affairs ministries and KSIDC on 15 February and to Exalogic Solutions on Sunday seeking comments for the story remained unanswered at the time of publication.
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Published: 18 Feb 2024, 22:59 IST
(tagsTo Translate)SFIO