Kerala High Court issues notice to CM's daughter on BJP leader's plea alleging corporate fraud involving CMRL

The Kerala High Court on Wednesday issued notice to Veena Vijayan and 11 others on a petition filed by BJP leader Shone George seeking further investigation into the serious corporate fraud and alleged illegal fund disbursement linked to Cochin Minerals and Rutile Ltd (CMRL) and Exalogic Solutions. [Shone George v Ministry of Corporate Affairs & Ors]

Justice CS Dias issued notice to Cochin Minerals and Rutile Ltd, Sasidharan Kartha, P Suresh Kumar, KS Suresh Kumar, Saran S Kartha, KA Saghesh Kumar, Muraleekrishnan AK, Nipuna International Pvt Ltd, Sasja India Pvt Ltd, Anil Ananda Panicker, Veena Thaikkandiyil, and Exalogic Solutions Pvt Ltd (respondents 6 to 18) and posted the matter for further consideration after four weeks.

The petition filed by George is a follow up to an earlier litigation in which the Court had granted liberty to seek appropriate relief based on the findings of the Serious Fraud Investigation Office (SFIO).

The SFIO, which submitted its final investigation report before the Special Court, named Veena Vijayan, Exalogic, CMRL and its managing director Sasidharan Kartha among the accused, detailing alleged fraudulent financial practices and bogus transactions.

As per the chargesheet, ₹2.7 crore was paid to Veena Vijayan and Exalogic without any actual services rendered, allegedly routed through shell companies Nipuna International Pvt Ltd and Sasja India Pvt Ltd.

The SFIO invoked serious provisions of the Companies Act, including Sections 447 (punishment for fraud), 448 (false statements), 129 (financial statement) and 134 (financial statement, board's report, etc), noting that the payments were shown as expenses to divert unaccounted money.

Section 447 of the Companies Act which deals with punishment for fraud carries stringent penalties including imprisonment up to 10 years and fine that can extend to three times the amount involved in the fraud.

George then moved the High Court with the present plea.

He stated that the SFIO report confined its investigation to the Companies Act and chose not to examine the motive or role of the recipients of these funds.

Challenging this stand, the petitioner submitted before the Court that the findings in the SFIO report warrant deeper investigation under the Prevention of Money Laundering Act, the Prevention of Corruption Act and the Representation of People Act.

There should be further investigation into the alleged large scale corporate fraud, money laundering, and corruption revolving around Cochin Minerals and Rutile Ltd, Exalogic Solutions Pvt Ltd, and their associates.

The petitioner was represented by Senior Counsel Shinu J Pillai along with advocates Mariya Rajan, S Suja, Ann Mariya John and Felix Samson Varghese.