The financial irregularities surrounding the controversial proposal to bring Lionel Messi to Keralam are coming to light one after another, with the Kerala Police Special Investigation Team (SIT) report pointing to a much larger web of alleged financial wrongdoing than initially indicated. The SIT has reported fraud amounting to Rs 549.22 crore and tax evasion of Rs 25.78 crore in connection with the Messi scandal, raising questions over money transfers, undisclosed funds, foreign transactions and the role of government institutions during the previous CPM-led LDF government headed by Pinarayi Vijayan.
The Reporter Broadcasting Company, owned by Augustine Brothers, was the proposed sponsor for bringing Lionel Messi to Keralam. The company’s money transfers had reportedly taken place without a formal legal contract.
Of the Rs 549.22 crore involved, the source of Rs 336.47 crore has not been declared. The SIT has found money laundering, unauthorised foreign currency transactions, secret US$ account transactions, unaccounted non-banking loans, Income Tax evasion and stamp paper fraud. State government institutions failed to prevent those misappropriations. The report has been handed over to the state government.
The report recommends handing over the inquiry to central agencies such as the Enforcement Directorate (ED), the Income Tax Investigation Team, the FEMA (Foreign Exchange Management Act) Section of the Reserve Bank of India, the Registrar of Chits and Central GST Intelligence.
The report also notes that, although GST officials had detected tax evasion, there were failures on the part of the Intelligence Officer in Kanjangad, the Intelligence Headquarters Deputy Commissioner in Tiruvananthapuram, the Deputy Commissioner (Intelligence) in Kasaragod, and the Joint Commissioner (Intelligence) in Kozhikode.
Disciplinary action has reportedly been recommended against them, along with investigations by the Registration Inspector General and a departmental inquiry in GST.
The SIT has found six accounts that are not linked with the sponsor’s company and were not mentioned in any official documents. These accounts are considered crucial to the investigation. Of the Rs 549.22 crore, Rs 212.75 crore was loaned by non-banking financial institutions.
Of the Rs 549.22 crore, the source of Rs 336.37 crore has not been declared. However, Rs 102.47 crore was shown as the company’s revenue and a return was filed accordingly. As a result, Rs 234 crore became unaccounted money.
The entire money went to the main sponsor’s account through the suspicious six accounts. This is how the SIT reportedly reached the conclusion that the fraud amounted to Rs 549.22 crore.
The SIT has reportedly calculated the state government’s loss at Rs 25.78 crore on the basis of the following data:
- GST Rs 22.68 crore for Rs 126.03 crore sent to the Argentina Football Association through the agents Tour Prod Enter.
- GST Rs 35.15 lakh on Rs 1.89 crore in five foreign transactions.
- Rs 2.75 crore was squeezed from the government as Input Tax by showing the inflated cost of renovation of the stadium.
The sponsor had declared that Rs 70 crore had been spent on renovating Jawaharlal Nehru Stadium, Kaloor, Kochi. Thus, the sponsor obtained Input Tax Credit worth Rs 2.75 crore. However, the engineering team of the Greater Cochin Development Authority (GCDA), the custodians of the stadium, found that the actual renovation expenditure was Rs 42 crore.
The SIT reportedly found a fraud of Rs 9.95 crore in stamp duties in connection with the sponsor company’s assets concerning transactions linked with Messi’s tour-related transactions, capital investment, loans and transactions in non-banking institutions.
The entire episode took place during the regime of the CPM-led Left Democratic Front (LDF) government headed by CPM supremo Pinarayi Vijayan.
The then Sports Minister V. Abdurahiman travelled abroad and held discussions regarding the visit of Lionel Messi and the Argentina national football team.
This being the case, Pinarayi Vijayan and his ministerial colleagues cannot shirk responsibility for the wrongdoings in this regard.
According to reports from Kochi, police have registered a preliminary case at the Kalamasserry Police Station. The ED is likely to take over the investigation into money laundering.
With the SIT flagging serious financial irregularities in the Messi case and the ED seeking an FIR against former Chief Minister Pinarayi Vijayan in the CMRL–Exalogic case, the responsibility now rests with Chief Minister V. D. Satheesan to demonstrate how his government will act.
