The Kerala High Court has put Chief Minister Pinarayi Vijayan, his daughter Veena Vijayan, Congress leader Ramesh Chennithala, and IUML leader PK Kunjalikkutty in the dock for taking monthly payments from the CMRL company engaged in ilmenite mining. A total of twelve respondents are named in the order, with the High Court emphasising the importance of hearing the defendants.
The controversy first came to light in August 2023 when this journal reported shocking allegations against Veena Vijayan. The Chief Minister’s daughter was accused of receiving monthly payments for three years (2017-2020) for purported services that were never rendered. The Income Tax Interim Settlement Board, operating under Section 245AA of the Income Tax Act, disclosed that the total payment amounted to Rs 1.72 crore.
Sources indicate that the New Delhi Branch of the Board explicitly linked these payments to a close association with a high-profile VIP. The controversy gained traction from January 25, 2019, and has since raised questions about the nature of these payments and their connection to individuals in positions of influence.
The HC order has come up in connection with the petition filed by late RTI activist Gireeshbabu in the wake of the dismissal of the petition, for Vigilance enquiry, by Muvattupuzha Vigilance Court, a lower court. The dismissed petition prayed for enquiry into the allegations of monthly payment CM Pinarayi, her daughter Veena Vijayan, late former CM Oommen Chandy, Congress leader Ramesh Chenithala and IUML leader Kunjalikkutty received from CMRL. The petitioner argued that the dismissal of the petition with the excuse of lack of prior permission from the government was wrong. He argued that Court had not asked him if he had sought government permission and had not heard his arguments.
After the sudden demise of the petitioner, Gireesh Babu, in September 2023, his family members submitted before the HC that they were not interested in continuing the litigation procedure; hence, the HC order can be construed as suo moto. In fact, the HC had appointed an amicus curiae to assist it in this case in view of the petition. Therefore, obviously, the amicus curiae report has its own bearing on the latest HC order.
We had reported in August that Veena Vijayan, got the monthly payment for three years, 2017–20, for some services that she was supposed to provide, but no service was rendered. According to the Income Tax Interim Settlement Board, functioning under Section 245AA of the Income Tax Act, the payment got was Rs 1.72 crore.
The New Delhi Branch of the Board had reportedly stated that these payments were made, thanks to their close association with a high-profile VIP. The controversy started back in January 25, 2019. Those days, IT was reported to have conducted a detailed and comprehensive investigation in the offices and residences of ‘important’ persons; then the inquiry moved to Cochin Minerals & Rutile Limited (CMRL), a private company Exalogic Solutions, the IT firm Veena entered into agreements with.
The investigation brought to light concrete evidence of improper payments of substantial amounts of money to media houses, trade union leaders, and political VIPs. Also, a document that talks about agreements between Veena Vijayan and her IT firm Exalogic Solutions, was reportedly discovered during the scrutiny of the residence of KS Sureshkumar, the Chief Financial Officer of CMRL.
Reports suggest that the investigation team scrutinised the records of tax payments from 2013 – 2014 to 2019 – 2020. It exposed a pattern of exaggerated expenses and major tax evasion on the part of CMRL. As a result, IT took action against CMRL and its key officials, including S.N. Sasidharan Kartha, its MD.
The Income Tax Interim Settlement Board (ITISB), formed under Section 245AA of the IT Act, has concluded its operations, including investigations and deliberations. It is reported that the decisions of the board is final and no chance for appeals. ITISB’s role is to evaluate settlement applications from individuals on alleged tax evasion.
Reports suggest that Veena and her firm, Exalogic Solutions, reached an agreement with CMRL in 2016 and 2017, respectively, to render services on IT, marketing consultancy, and software services. Further investigations revealed that these services were allegedly never fulfilled. Despite CMRL MD’s initial claim of compliance with the contractual terms, his statement was challenged by the IT Department.
It is alleged that, according to the IT’s findings, a significant sum of Rs 1.72 cr was transferred to Veena and Exalogic Solutions between 2017 and 2020. The ITISB’s Bench concludes that these funds were disbursed for services which were not actually provided at all.
CMRL officials have reportedly submitted that they are not aware of getting any services from Veena and Exalogic. CMRL’s Chief Financial Officer KS Sureshkumar and Chief General Manager P. Sureshkumar are among those officials.
The latest development is a rude shock to the CM and his government. It is to be remembered that since CM Pinarayi presides over the Home Ministry, the Vigilance Department comes under him. Therefore, if Vigilance Department initiates an inquiry, it will not be nice for the CM to continue in power. Now, the political observers wait and see what step CM takes.
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