Karnataka High Court dismisses plea challenging SFIO probe against firm owned by Kerala CM's daughter

The Karnataka High Court on Friday dismissed a petition challenging the initiation of a probe by the Serious Fraud Investigation Office (SFIO) against Exalogic Solutions Pvt. Ltd, a software company owned by Kerala Chief Minister Pinarayi Vijayan's daughter, Veena Thaikkandiyil..The order was pronounced this afternoon by Justice M Nagaprasanna..The judge had reserved his judgment in the matter on February 12 after hearing arguments by Exalogic and the Central government. .Senior Advocate Arvind Datar had appeared for Exalogic and told the Court that a probe by the Registrar of Companies (RoC) under Section 210 of the Companies Act is already ongoing and that a parallel investigation by the SFIO is not permissible.These submissions were countered by the Central government's counsel who pointed out that since the SFIO probe has been launched, there is no question of parallel proceedings..The SFIO probe in question was launched against Exalogic through an order dated January 31, 2024.The Central government's counsel had asserted that there were serious offences and public interests involved in the Exalogic case which necessitated an inquiry by a multi-disciplinary agency like the SFIO. Exalogic's case, he went on to submit, is tied to a revelation by the Income Tax Department that the Cochin Minerals and Rutile Limited (CMRL) had distributed an amount of ₹135 crores to political functionaries which it later claimed were "expenses."Of this amount, ₹1.76 crores were paid to Exalogic, although no corresponding software services were provided, the government counsel said.A government entity, known as the Kerala State Industrial Development Corporation (KSIDC), also has a 13.4% stake in CMRL, it was pointed out. CMRL itself was found to have undertaken several "shady" transactions, the Court was told. It was in such circumstances that the SFIO probe was launched, the government counsel said..On the other hand, Exalogic had asserted that there was no fraud necessitating the launch of an SFIO probe in the matter.It was argued that the only allegation against Exalogic is that it had related party transactions worth ₹1.76 crores with CMRL, which was already being inquired into by the Registrar of Companies under Section 210 of the Companies Act. .[Read Order]