The ED, in a report filed before the Adjudicating Authority in the money laundering case against Kochi-based CMRL, said the company's former managing director had admitted that payments were made to Veena T because of her personal relationship with the then Kerala Chief Minister Pinarayi Vijayan. The probe relates to allegations that CMRL paid Rs 2.78 crore to Exalogic Solutions Pvt Ltd, a company owned by Vijayan's daughter Veena, without receiving any services in return. The ED filed the report before the Adjudicating Authority seeking attachment of the properties of the accused in the case.
According to the report, S N Sasidharan Kartha, founder and former Managing Director of Cochin Minerals and Rutile Ltd, exercised absolute control over the company and allegedly orchestrated a layered scheme to misappropriate Rs 182 crore over a period of 15 years. The report alleged that the scheme involved fictitious cash expenses of Rs 139 crore booked under "Sludge Handling and Transportation Expenses" using self-generated vouchers without supporting invoices or actual services. It alleged that another Rs 43 crore was siphoned off through inflated invoices raised by known vendors, who allegedly withdrew the excess amounts in cash and returned them to CMRL officials after deducting their commissions. "This is nothing but circular payments made from CMRL bank accounts and taken back from vendors in cash by Kartha and others," the report said.
The Enforcement Directorate further alleged that Rs 2.78 crore in bogus expenses was booked in the name of software services and paid to Veena and her company Exalogic without any services being rendered to CMRL. Referring to Kartha's statement recorded under Section 50 of the Prevention of Money Laundering Act on April 17, 2024, the report said he admitted that funds were transferred to vendors, who withdrew the money in cash and returned it to him or his associates without any genuine expenditure being incurred. "He admitted that payments were made to Veena and Exalogic despite no services being rendered, citing her personal relationship with the then Kerala CM Pinarayi Vijayan," the report said.
The report alleged that the sham payments of Rs 2.78 crore for non-existent ERP services were corroborated by statements from Kartha and others, including Veena, who admitted that no deliverables had been provided to CMRL. "Veena could not provide any evidence of tangible work carried out for CMRL in lieu of the Rs 2.78 crore received in the name of IT consultancy services," the report said. The ED alleged that Exalogic operated with a fragile financial base, with a negative net worth of Rs 66 lakh and a standalone business turnover of just Rs 5 lakh, making its financial existence almost entirely dependent on funds received from CMRL. It alleged that Empower India Capital Investments Private Limited, a non-banking financial company owned and operated by Kartha, extended loans totalling Rs 50 lakh to Exalogic. "Despite Exalogic's failure to repay the loan under normal commercial terms, bank statements reveal that the funds received from CMRL were siphoned out of Exalogic's account through direct RTGS transfers," the report said.
The ED report said payments made by CMRL directly to Veena were initiated even before any invoices were submitted by her, specifically between January 2017 and October 2017, totalling Rs 45 lakh. According to the ED, ATNA Technologies was later hired by CMRL for similar IT services and delivered structured outcomes at a far lower cost, underscoring, according to the agency, the absence of justification for payments made to Exalogic and Veena. "Email correspondence between Veena and CMRL's MD was predominantly focused on invoice generation and payment processing rather than actual IT service provision," the report said.
The ED said items seized from Veena's residence included an iPhone 14 Pro Max, a red-covered diary (pages 1 to 9) and a loose A4 sheet. According to the ED, these digital and physical records are highly relevant to unearthing the terms of the alleged sham IT consultancy and marketing service contracts executed between CMRL, Exalogic and Veena. "The iPhone is critical for forensic extraction of email correspondence and communications that predominantly focus on invoice generation and payment processing rather than actual service delivery. The diary and loose sheet are essential to check for financial entries, notes or payment trail details concerning the siphoning of corporate funds and clearance of private liabilities," the report said.
Veena's husband and MLA P A Mohamed Riyas declined to comment when reporters sought his response on Saturday. "I cannot say what is not known to me. We are cooperating with the investigation. Nothing more can be said about it," he told reporters. The agency had earlier alleged that Veena and the CMRL management, led by Kartha, generated "proceeds of crime" through these transactions. The ED has questioned Veena and members of the CMRL board on multiple occasions as part of the investigation. The agency registered the case under the PMLA based on a prosecution complaint filed by the Serious Fraud Investigation Office before a court in Kochi.