CMRL–Exalogic case: Will ED probe the alleged offshore fund transfers, UAE account linked to Veena?

In April 2024, lawyer Shone George approached the Enforcement Directorate with a letter offering help in an investigation. Just a few months earlier, based on his complaint, the Serious Fraud Investigation Office (SFIO) had begun probing alleged fraud involving two companies, Cochin Minerals and Rutile Ltd (CMRL) and Exalogic Solutions Pvt Ltd, the latter an IT firm owned by Veena T., daughter of then Kerala chief minister Pinarayi Vijayan.

Now, George claimed that several undisclosed sources, including government officials, were sharing information with him that could help the ED.

By then, the controversial transactions involving the two firms, first reported by the Malayala Manorama, had prompted the ED to launch an investigation under the Prevention of Money Laundering Act (PMLA).

In his letter, George—now the BJP state vice-president—claimed to have received “credible information” that a large amount of money linked to the transactions had been parked in an account in the UAE. He alleged that Veena was one of the account holders.

The SFIO, in its investigation, had found that Exalogic relied mostly on CMRL for its revenue. Under a service agreement, CMRL paid Exalogic Rs3 lakh a month and Veena Rs5 lakh a month as an IT and marketing consultant. Exalogic had also borrowed Rs50 lakh from a company run by CMRL managing director Sasidharan Kartha. According to the SFIO, Kartha and Veena siphoned off Rs2.78 crore from CMRL, in which the Kerala State Industrial Development Corporation, a government agency, holds a 13.41 per cent stake. A substantial portion of this amount was allegedly used to repay Exalogic’s loan.

On April 3, 2025, the SFIO filed a prosecution complaint (similar to a charge-sheet) alleging fraud under Section 447 of the Companies Act—an offence scheduled under PMLA. This was important for the ED. Though the agency does not investigate company fraud, the fact that Section 447 was invoked meant that the SFIO believed there was fraud, which meant the ED could investigate the money laundering angle—where the “proceeds of the crime (fraud)” went.

CMRL, meanwhile, challenged the SFIO proceedings in the Delhi High Court, and the matter is still pending. The company had also approached the Kerala High Court against the ED investigation, but on May 26 this year, the court dismissed the petition to quash the probe.

The following day, the ED searched premises linked to CMRL and its subsidiaries, as well as the rented residence of Veena and Pinarayi Vijayan in Thiruvananthapuram. Angered by the “disrespect” to their ‘Captain’, some CPI(M) workers allegedly attacked ED officials. Following the searches, the ED froze Rs18.36 crore across 242 bank accounts.

CMRL then filed an appeal against the May 26 order, but on June 5, a division bench of the Kerala High Court also refused to quash the proceedings.

The agency got another boost on June 8, when a PMLA court in Kochi allowed it to obtain documents from the SFIO investigation. The following day, the ED issued summons to nine accused, including Veena.

Emboldened by the green light to the ED, Shone George once again approached the agency, renewing his demand to widen the probe into suspected offshore money transfers. He claimed that large sums of money from the Canadian engineering firm SNC-Lavalin and PricewaterhouseCoopers (PwC) were routed through the aforementioned UAE account to various bank accounts in the US.

George told THE WEEK that an investigation into these alleged transactions would uncover the missing link that could lead to Vijayan. “People will instantly know who he really is,” he said.

Vijayan had previously been accused of receiving kickbacks for a contract that the Kerala State Electricity Board had awarded to SNC-Lavalin for the renovation of hydroelectric projects. This was in the 1990s, when he was electricity minister. In 2013, a CBI court discharged Vijayan, citing insufficient evidence. The CBI’s appeal against this is pending in the Supreme Court.

“If money laundering has taken place, and if the chief minister’s daughter received money without providing any services, then it is certainly a bribe meant for the chief minister,” George alleged.

Importantly, neither the ED nor the SFIO has established any direct link between the transactions and Vijayan till now.

George, who expects Veena to be arrested soon, said he first got involved in the case partly for “personal revenge”. Notably, his father, P.C. George—a controversial and outspoken politician—faced a series of arrests in 2022 during Vijayan’s rule. “However, it is no longer about that. As I delved deeper into this case, I realised that if I had not brought it to light, no one else would have,” he said, adding that he had done two months of intense research before moving the petition for SFIO investigation.

In April 2025, when the SFIO filed its prosecution complaint, the CPI(M) was holding its 24th Party Congress in Madurai. The development sparked a debate on whether the party should officially defend the case. At a news conference, Polit Bureau member Md Salim said the decision on whether to pursue legal remedies rested with the “concerned party”—Veena herself. By several accounts, there is still uncertainty within the party on how to handle the case.

On May 27, when the ED conducted searches, the CPI(M) state leadership said it was an attack on the party itself. However, after the attack on the ED officials, several leaders have indirectly suggested that, for now, the party has little role to play in the matter.

“If it is solely a matter involving Veena [and not Vijayan], why should the LDF defend it? I understand that this question is being asked within both the CPI(M) and the CPI,” said political observer N.M. Pearson. He added that the CPI(M) initially believed that confronting the ED would help it regain the political initiative and rally cadres demoralised by the recent election loss. “But I think the party misread Kerala society. The move has backfired because people do not approve of that kind of aggression. The CPI(M) now seems to realise that its response was a political miscalculation. It also points to the intellectual deficiency the party faces in reading the political mood.”

Interestingly, the CPI(M) also hit out at the Congress, even though the ED is a central agency. Party state secretary M.V. Govindan claimed that CMRL itself had said that two sitting cabinet members had received money from the company and had admitted to doing so, yet no action had been taken against them.

These claims stem from loose sheets allegedly maintained by CMRL officials that apparently contained the initials of several Kerala leaders. Significantly, the initials “PV” also appear in the documents. During an income tax raid at CMRL’s corporate office in 2019, the company’s CFO K.S. Sureshkumar reportedly told officials that cash payments had been made to leaders identified by the initials “PV”, “RC”, “OC”, “KK”, as well as to various political parties, media organisations and police officers to help the company do business smoothly. The initials allegedly stand for Pinarayi Vijayan, Congress leaders Ramesh Chennithala and Oommen Chandy, and Muslim League leader P.K. Kunhalikutty.

It was this IT raid on CMRL that found that the company had inflated its expenditure by more than Rs133.82 crore, between 2012-13 and 2018-19, by booking bogus expenses. Statements made by CMRL officials eventually triggered the series of investigations now being pursued.

George believes the probe will eventually extend to leaders across party lines.

The CPI(M), however, rejects the claim that “PV” refers to Vijayan, while also relying on the same loose-sheet allegations to target the Congress. Said CPI(M) Rajya Sabha member John Brittas, who attended the INDIA bloc meeting in Delhi on June 8: “Congress leaders should focus on defending those within their own ranks who, in connection with the CMRL issue, face allegations far more serious than those levelled against Veena.”