Kochi: The Enforcement Directorate (ED) is widening its probe into the CMRL-Exalogic financial transactions, with the investigation now closing in on former Chief Minister Pinarayi Vijayan. Based on the statement of businessman Sasidharan Kartha, the ED is expected to soon decide on questioning Pinarayi.

According to the ED, Kartha stated that the money was paid to T Veena because of his personal relationship with Pinarayi Vijayan, and not in return for any services. This has become a key aspect of the investigation.

Initially, Veena had claimed that Exalogic had provided services to CMRL. However, she was unable to produce documents or records to support this claim. She reportedly told investigators that the relevant data was stored in Exalogic's Bengaluru office system, but that the office had since shut down. ED says Veena later admitted that no services had in fact been provided.

The agency considers that ₹45 lakh being transferred to Veena over a 10-month period from January to October 2017 without a single invoice being issued is a very serious issue. It is also examining whether CMRL received undue favours from the Kerala government and whether the payments were made in return for such benefits.

Exalogic running in loss

According to the ED's findings, Exalogic, where Veena served as a director, had a weak financial base. The company had a turnover of only ₹5 lakh while reporting losses of ₹66 lakh. The agency says the firm relied heavily on funds received from CMRL.

CMRL allegedly paid Exalogic ₹3 lakh every month under the guise of IT consultancy and marketing services. Veena was also paid ₹5 lakh a month as a consultant. In addition, Exalogic received a ₹50 lakh loan from Empower India Capital Investment Pvt Ltd, the non-banking financial company (NBFC) owned by Sasidharan Kartha.

Another company linked to Veena

The ED has also found that Veena has a stake in another company, Laker India Corporation, registered in Kozhikode. The agency has frozen ₹1,557,414 in the company's bank account as part of the investigation. During ED searches, Veena's mobile phone, diary and a sheet of paper were among the items seized.

Alleged ‘Circular’ funding

Investigators allege that CMRL generated fake invoices and routed funds to multiple entities through bank transactions, with the money eventually returning to the company in cash.

Earlier investigations by the Serious Fraud Investigation Office (SFIO) had concluded that CMRL showed ₹139 crore in fictitious expenses under the heads of desilting and cargo handling, while inflating bills for services to channel another ₹43 crore to contractors.

Under the alleged arrangement, CMRL transferred money online to contractors engaged in desilting and cargo transportation. The contractors would then withdraw the funds in cash and hand them over to the company's Chief Finance Officer or Chief General Manager. They reportedly received commissions of up to 7% for facilitating the transactions.

The ED has also found from bank records that money received by Exalogic from CMRL was subsequently transferred to the account of Empower India. The records show transfers of ₹200,000 on November 10, 2016, ₹150,000 on December 15, 2016, and ₹50,000 on January 20, 2017.

The agency notes that CMRL paid Veena the ₹45 lakh between January and October 2017 even before she submitted any invoices.

Shareholders also allegedly misled

According to the investigation, CMRL funds were also routed through circular funding to Nipuna International Pvt Ltd, a company controlled exclusively by Kartha's family.

Vahini Transporters, a contractor engaged by CMRL for desilting and cargo handling, allegedly transferred ₹90 crore to Nipuna through this mechanism. Despite CMRL being a publicly listed company, these transactions were allegedly concealed from shareholders.

The investigation further says that ₹13.32 crore earned as commission from these circular funding transactions was allegedly diverted to Dubai by Sasidharan Kartha and his son-in-law, Anil Ananda panicker.