ED Expands CMRL Probe; Alleges Rs 1.72 Crore Paid to Former Kerala CM's Daughter Veena Vijayan's Firm Without Services

New Delhi: The Enforcement Directorate (ED) has widened its investigation into the Cochin Minerals and Rutile Limited (CMRL) case, alleging that the company paid Rs 1.72 crore to Exalogic Solutions Pvt Ltd, a firm owned by former Kerala Chief Minister Pinarayi Vijayan's daughter Veena Vijayan, for software services that were never provided.In submissions before the Kerala High Court, the ED cited findings from a 2019 Income Tax Department search that allegedly uncovered large-scale inflation of expenses by CMRL.According to the agency, the company booked fictitious expenses worth Rs 133.82 crore under heads such as transportation and sludge handling between FY 2012-13 and FY 2018-19. The Income Tax Department concluded that the inflated expenditure

helped generate unaccounted cash.The ED quoted the tax authorities as saying that such "inflated expenditure enabled the generation of unaccounted cash, which was subsequently utilised for making illegal payments to politicians, political parties, media houses and public servants."The agency also referred to statements made before Income Tax authorities by CMRL's Chief Financial Officer and Managing Director. According to the ED, the executives admitted that "such payments had been made to ensure the smooth functioning of the company's business operations in the face of perceived threats of closure and environmental challenges."The ED said it relied on loose sheets allegedly recovered from the residence of former CMRL CFO S. Suresh Kumar, along with statements recorded from him and the company's Managing Director during the tax investigation.According to the ED, "these materials substantiate the allegations regarding the aforesaid illegal payments."After the 2019 searches, the Income Tax Department estimated that Rs 135.54 crore in bogus expenditure had been used for cash payments during FY 2012-13 to FY 2018-19.CMRL later approached the Income Tax Settlement Commission and admitted to inflated expenses of Rs 134.27 crore. However, the company maintained that the Rs 1.72 crore paid to Exalogic Solutions was a genuine business transaction.In its June 12, 2023 order, the Settlement Commission upheld the Income Tax Department's findings regarding inflated expenses, generation of cash for illegal payments, and the alleged fictitious payment of Rs 1.72 crore to Exalogic Solutions without any services being rendered.The ED further argued that because CMRL is a publicly listed company with public shareholders and Kerala State Industrial Development Corporation (KSIDC) holding a stake, the alleged diversion of company funds caused financial losses to shareholders.According to the agency, "such diversion diminished the profits available for distribution to the shareholders and amounted to dishonest or fraudulent removal and concealment of company funds, attracting Section 447 of the Companies Act, 2013, the same being a scheduled offence.""The shareholders of the CMRL are victims of offences involving cheating, criminal conspiracy, and dishonest or fraudulent removal or concealment of property, allegedly committed by the Company and its Directors," the ED said.The agency informed the court that the Ministry of Corporate Affairs had ordered an investigation into the matter, which was later handed over to the Serious Fraud Investigation Office (SFIO).The ED also stated that the alleged illegal payments generated "proceeds of crime" in the hands of recipients, including Exalogic Solutions Pvt Ltd, making the transactions subject to investigation under the Prevention of Money Laundering Act (PMLA).The agency further told the court that it had sent a reference to Kerala Police seeking registration of criminal cases under various sections of the Indian Penal Code.Meanwhile, the SFIO filed a complaint on April 3, 2025, alleging violations of the Companies Act, including offences under Section 447, which is a scheduled offence under the PMLA.