Kochi: The legal battle surrounding the CMRL-Exalogic deal has shifted dramatically following directions to register a Vigilance FIR, effectively expanding what was primarily a corporate regulatory inquiry into a full-fledged criminal investigation into the source and destination of funds. The registration of the Vigilance FIR also clears the way for the Enforcement Directorate (ED) to file an Enforcement Case Information Report (ECIR) under the Prevention of Money Laundering Act (PMLA).

Until now, probes by agencies such as the Serious Fraud Investigation Office (SFIO) focused on corporate improprieties.

The new phase will directly examine why Kerala Mining and Rutile Limited (CMRL) made payments totaling ₹3.28 crore to T Veena and her firm, Exalogic Solutions, between 2017 and 2019 under the guise of service legal agreements and consultancy fees, without any documented services being rendered.

Key accusations detailed in HC filings by ED

1. Pinarayi Vijayan: Accused of accepting ₹3.28 crore in kickbacks through his daughter Veena, based on statements by CMRL Finance Officer Suresh Kumar.

2. P A Mohamed Riyas: Alleged to have received kickback funds and facilitated their transfer to Dubai via Veena and associates.

3. T Veena: Accused of aiding in the collection and laundering of bribe money on behalf of Vijayan and Riyas.

4. Exalogic Solutions Pvt Ltd: Alleged vehicle for routing illicit funds.

5. Sasidharan Kartha and P Suresh Kumar: Accused of paying and facilitating kickbacks.

6. Empower India Capital Investments Pvt Ltd: Entity allegedly utilised to transfer bribe money.

7. Associates (Shaijal, P Nikhil, Hasan Waris, V P Faijas, M Nandulal and others): Alleged to have assisted in collecting, transferring and laundering funds.

Immediate legal and investigative impact

Under the Prevention of Corruption Act, the Special Vigilance Team can interrogate any named individual, including Chief Minister Pinarayi Vijayan and Minister P A Mohamed Riyas, without requiring prior sanction. If arrests occur, procedural notification must be given to the Speaker of the Kerala Legislative Assembly.

Crucially, while the prosecution bears the burden of proof in a police/Vigilance case, any subsequent PMLA case by the ED places the burden on the accused to prove innocence. The Vigilance team will need to independently substantiate that payments received by Exalogic constituted kickbacks and hawala transfers.

Potential legal appeals

Legal experts indicate that Chief Minister Pinarayi Vijayan, P A Mohamed Riyas and T Veena may challenge the High Court Single Bench order before a Division Bench or seek to quash the FIR once registered.
Key grounds for appeal may include,

  • The Single Bench ordered a Vigilance FIR without hearing the accused parties
  • Directions were issued under the Prevention of Corruption Act without prior sanction or a preliminary inquiry.

The Kerala state government is unlikely to challenge the order, as the High Court explicitly determined that the ED report contains sufficient material to warrant an FIR.