It has been almost two weeks since the Income Tax Interim Settlement Board found that Kochi-based Cochin Minerals and Rutile Limited (CMRL) illegally paid Rs 1.72 cr to Kerala Chief Minister Pinarayi Vijayan’s daughter Veena T and her company Exalogic Solutions Private Limited. The CM has maintained his trademark silence on the issue even as his party colleagues are rallying around him and his daughter. Pinarayi Vijayan as the Chief Minister has chosen to remain mum on several allegations before but unlike in the past, his stoic silence is untenable because questions of impropriety have reached his doorstep.
A breakup of the payments shows that of the Rs 1.72 cr, paid over three years as monthly instalments, an amount of Rs 55 lakh was personally paid to Veena and Rs 1.17 cr to Exalogic, a One Person Company (OPC), where she is a director. The I-T report said CMRL’s managing director Sasidharan Kartha has made payments to politicians, police and even prominent media houses to ensure ‘smooth running’ of his business. But here’s the illegality: the I-T panel’s ruling, citing evidence, observes that no service was provided by Exalogic to CMRL, raising the question of what the money actually was for.
As per the agreement, Exalogic Solutions Pvt Ltd was to provide "development, maintenance and management of softwares for daily business and operation" of CMRL. The company's Chief Financial Officer stated that the only softwares they used were Tally for accounting, Outlook for email communication and Power Builder for inventory records. Veena was also engaged as IT and marketing consultant of the company for a consolidated sum of Rs 5 lakh per month from January 1, 2017.
Congress MLA Mathew Kuzhalnadan alleged that there is evidence of Veena’s company receiving payments from other firms as well. He asked Veena and Pinarayi Vijayan to come clear on whether Exalogic has paid Integrated Goods and Services Tax (IGST) to be paid in all intra-state trade and service transactions. He also wrote to Finance Minister K Balagopal in this regard Though sources in the IGST department say that prima facie taxes seem to have been paid, the answer has not come from Pinarayi himself.
The principal Opposition Congress too has asked why Pinarayi and his daughter have not addressed the allegation. But Pinarayi’s party colleagues are the ones who have been encumbered with the task of defending him and his daughter
Pinarayi’s silence is even more curious because his daughter or her firm have not even sought legal relief against the report of a quasi-judicial body like the Income Tax Interim Settlement Board. Political statements alleging a political conspiracy will not pass muster if the legal recourse is not explored, when the option is easily available.
Documents to prove tax evasion by inflating expenditure were found In the I-T Department searches conducted on CMRL’s office, factory and its MD Sasidharan Kartha and Chief Financial Officer KS Suresh Kumar’s residences on January 25, 2019.
More significantly, documents of other murky transactions were also recovered; ‘illegal payments’ to politicians, police officers and media houses to ensure ‘smooth functioning’. In news reports based on the deposition of CFO Suresh Kumar, he is quoted as having said that “payments were made to functionaries/members of various political parties, media houses, trade unions and police etc for smooth functioning of our business in view of the fact we obtain ilmenite which is mined by PSUs as our raw material”.
Then there is the angle of conflict of interest. CMRL is a public-listed company which is categorised as a non-government company. But in 1994, the state-run Kerala State Industrial Development Corporation Ltd (KSIDC) was allotted shares. So CMRL is answerable regarding its financial discrepancies and the illegal payments to its shareholders including the KSIDC. But will the agency under the state government seek accountability?
In the past, the Chief Minister has chosen to not speak on many controversies, prompting the Opposition to demand a statement from him, either in the state Assembly or outside. When fire broke out in Brahmapuram dumpyard in Kochi, with the smoke engulfing the city in March this year, the CM had refused to comment on the role of Zonta Infratech, the agency which had bagged biomining contract from Kochi Municipal Corporation, and had faced allegations of having links to a former convener of the Left Democratic Front.
When Swapna Suresh had accused Pinarayi Vijayan and members of his family of smuggling currency and gold, the Chief Minister had chosen to not address the issue for many weeks. In Swapna’s instance, one could argue that the allegations were made without solid proof. But this time around, serious questions of financial impropriety are being raised over the dealings of his daughter’s company by a corporate accused of bribing politicians and political parties. There are also allegations that the CMRL was given concessions with regard to mining of mineral sand, which has environmental consequences for Kerala’s coast after the LDF came to power. The continuing silence of Pinarayi Vijayan would only help in weakening the anti-corruption stance of the CPI(M).
It most certainly would go against the ‘rectification charter’ the CPI(M) Central Committee in 2009 which said are should be taken to see that family members and close relatives of party leaders and those holding public office do not take advantage of their position to acquire pecuniary gains or assets disproportionate to their known sources of incomes.