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HC refuses to stay probe into firm of Kerala CM’s daughter
The Income Tax Interim Settlement Board had ruled that CMRL had paid ₹1.72 crore in monthly instalments to Exalogic in a three-year period despite no services being rendered by Veena’s firm
The Karnataka high court on Friday refused to stay the ongoing probe by the Special Fraud Investigation Office (SFIO) into the affairs of Kerala chief minister Pinarayi Vijayan’s daughter Veena T’s firm Exalogic Solutions Private Limited.
A bench of Justice M Nagaprasanna rejected the plea of Exalogic Solutions challenging the union ministry of corporate affairs’ (MOCA) direction to the SFIO to probe the company in connection with its suspicious financial transactions with Cochin Minerals and Rutile Limited (CMRL), a minerals firm based in Kochi. Details of the high court’s interim ruling on the petition is expected to be available by Saturday.
The Income Tax Interim Settlement Board last year had ruled that CMRL had paid ₹1.72 crore in monthly installments to Exalogic in a three-year period despite no services being rendered by Veena’s firm. The opposition in Kerala has alleged that the payments were bribes as Veena was connected to an important political figure in the state. CM Vijayan has claimed that his “hands are clean” and welcomed any probe.
The high court had reserved its order in the case on February 12 and asked the central agency not to take coercive action against the firm until the ruling was pronounced. It also directed Veena’s firm to provide the SFIO the documents it had sought.
Veena’s firm had contended before the high court that MOCA had initially ordered a probe by the Registrar of Companies (RoC) under Section 210 of the Companies Act 2013 against it. While that probe was pending, it ordered the SFIO to launch another probe under Section 212 of the Companies Act. The petitioner said that two parallel investigations cannot be conducted against it simultaneously and requested for a stay on the SFIO probe.
The counsel for the central government, when asked about the status of the RoC probe, replied that the SFIO will take over all documents connected to the case and that the agency can seamlessly gather information.
It also told the court that a probe by the income tax department had found that CMRL had paid ₹135 crore to several political leaders. Additionally, ₹1.72 crore was paid to Exalogic in a three-year period even though no services were rendered in return.
“When ₹135 crore is involved, there are a lot of transactions which look shady. Officers said we cannot get information from the income tax department and it may be placed before SFIO. The union government need not hear the petitioner before ordering an investigation,” Additional Solicitor General Arvind Kamath told the HC.
