CMRL bribery case: Will UDF act on ED report against Pinarayi Vijayan?

Cochin Minerals and Rutile Ltd (CMRL), a listed company based in Kochi, has been using the same slogan for years: “From Nature, With Nature, Towards Nature.” The irony has not been lost on Kerala. The company, which began synthetic rutile production in 1993 and has since exported its products to the US and Japan, has repeatedly faced allegations of pollution and environmental exploitation. Back in 2010, when the Left Democratic Front government led by V.S. Achuthanandan was in power, CMRL’s promoter, controversial industrialist Sasidharan Kartha, reportedly figured on the state’s nomination list for the Padma awards. The fact that his name made the list was notable, since Achuthanandan, a staunch advocate of environmental protection, had earlier opposed Kartha’s push into mineral-sand mining.

Yet Kartha managed to end up in Achuthanandan’s good books. In 2012, after losing power, Achuthanandan went so far as to praise Kartha at a public function and take a dig at those who had raised pollution allegations against CMRL, calling them “fake environmentalists”.

Kartha’s political connections have always cut across party lines. When Pinarayi Vijayan, whose factional rivalry with Achuthanandan defined two decades of Kerala’s CPI(M), came to power, Kartha got access to him, too. In 2018, after Kerala’s devastating floods, Kartha donated Rs2.58 crore to the Chief Minister’s Distress Relief Fund, and Vijayan personally accepted the donation at a public event.

By then, Vijayan’s daughter T. Veena was also drawing money from Kartha. A “service-level agreement” signed in March 2017 with CMRL gave Veena’s IT firm Exalogic Rs1.72 crore for software-related services. In addition, she was paid Rs3 lakh a month. Both Veena and the company together received Rs2.78 crore from CMRL between March 2017 and January 2019. But an income tax department search in January 2019 found no evidence of services having been rendered. Loose sheets recovered from CMRL’s chief financial officer K.S. Suresh Kumar during the search recorded cash payments to leaders across parties, who were identified by their initials. The diary entries included the initials of Vijayan, current home minister Ramesh Chennithala and industries minister P.K. Kunhalikutty.

The anomalies drew in the Serious Fraud Investigation Office and the Enforcement Directorate. Though Vijayan himself has stayed clear of any criminal case so far, on September 8, the ED sent Kerala’s police chief a 25-page report seeking registration of FIRs under the Prevention of Corruption Act against him, Veena, her husband and former tourism minister P.A. Mohamed Riyas and several other persons and entities. The report alleged that Rs3.28 crore in bribes for Vijayan were routed through Veena, including a Rs50 lakh loan she received from a Kartha-run firm.

ED had made an earlier recommendation, when Vijayan was chief minister. It went nowhere for want of a predicate offence (the primary, underlying crime that generates illegal money or property). “Pinarayi sabotaged the entire case from where he was sitting,” says political observer Joseph C. Mathew. “To obstruct the ED investigation, all they had to do was ensure that there was no predicate offence.” In May this year, the Kerala High Court ruled that the absence of a scheduled-offence FIR did not bar ED proceedings under PMLA. By then Vijayan was out of power. Searches followed, at Veena’s residence and properties related to her, which yielded handwritten accounts, which the ED says showed Rs85 lakh moved to Dubai and also details of accounts totalling Rs20.05 crore.

On August 18, the net widened to Riyas’s circle. The ED says Riyas, the sitting MLA from Beypore, took other bribes—which are not part of CMRL receipts—and used Veena and associates to move funds to Dubai, though its sources concede the money’s origin is unclear and the figures rest on Veena’s notes alone. Riyas has said that the matter will be dealt with “politically and legally”.

The timing of the ED’s latest move could hardly be worse for the CPI(M), ahead of an extended state committee meeting starting from September 13 in Kozhikode to review the party’s Kerala election debacle. The ED’s letter also names P. Nikhil, the party’s Kozhikode district secretariat member, and DYFI functionary N. Nandulal as alleged facilitators in the collection and transfer of funds, raising the uncomfortable prospect that the party’s own machinery served the family’s private ends.

Some analysts, however, see the probe as a blessing in disguise. Political observer K.C. Umesh Babu says an isolated Vijayan could cast it as a political witch-hunt to rally the party behind him, deflecting from other troubles likely to surface at Kozhikode. Acting on the ED’s letter, Babu says, may hurt the Congress-led government just as much, since Chennithala and Kunhalikutty also allegedly feature in the diary entries of Kartha’s associates.

The V.D. Satheesan government is caught between using the probe to put the opposition on the back foot and being blamed for doing the ED’s bidding. Refusal to take action would lead to the BJP labelling it a LDF-UDF “adjustment”. Chennithala’s response to the latest ED demand has been carefully non-committal: “What needs to be done legally will be done.” His words could have a wide range of interpretations when it comes to politics.