When the Customs Department confiscated 30kg of illegal gold worth Rs 14 crore from diplomatic baggage addressed to a senior diplomat at the UAE consulate in Thiruvananthapuram, it was perhaps the first such instance in the world involving a diplomatic mission. The package addressed to Rashid Khamis Al Sheimeili, the chargé d'affaires at the consulate, arrived on June 30 and was said to contain food, shoes and some machinery needed for the consulate. Normally, such packages were cleared quickly and were often collected by P.S. Sarith, a former employee of the consulate. But this time, Customs officials sent him back, citing minor billing errors, although he had come with a formal authorisation letter.
For the next few days, several officials from the consulate tried their best to get the package released, quoting relevant provisions of the 1961 Vienna Convention on diplomatic relations. Swapna Suresh, who had served as executive secretary of Consul General Jamal Hussain Al Zaabi, led the efforts and put immense pressure on local Customs officials. She told Customs officials that the diplomats were angry and the incident could affect bilateral relations.
Meanwhile, the ministry of external affairs contacted the UAE ambassador in New Delhi and apprised him about the seriousness of the situation. Finally, the ambassador gave his permission to examine the baggage in the presence of the chargé d'affaires in Thiruvananthapuram. Before the search on July 5, senior officers of the Intelligence Bureau and the National Investigation Agency were alerted. A ten-member special team of the Customs Department under the preventive commissioner in Kochi was tasked with examining the baggage. They were to report directly to National Security Adviser Ajit Doval. After the search, the team found 30kg of unaccounted gold from the baggage.
The case soon turned into a major political controversy as it became clear that Swapna Suresh, who was among the prime accused, had close ties with M. Sivasankar, who was then principal secretary to Chief Minister Pinarayi Vijayan. The senior IAS officer, who was a key power centre in the chief minister’s office, seems to have shown an undue interest in Swapna Suresh’s financial dealings and was even said to have entrusted his chartered accountant to hide her unaccounted money, putting the chief minister and his office under a shadow of doubt.
As many as four Central agencies and the state vigilance department are directly involved with the investigations. The Customs is investigating smuggling and FEMA (Foreign Exchange Management Act) violations, the NIA is looking at whether the money earned from smuggling was given to anti-national groups and the Enforcement Directorate is probing the money-laundering aspect of the operations under the Prevention of Money Laundering Act. The CBI got involved after the ED found Rs 1.08 crore in a bank locker jointly owned by Swapna Suresh and Sivasankar’s chartered accountant.
Swapna Suresh told the ED that the money was part of the commission she received from a construction company for swinging a deal to build flats for the LIFE Mission programme of the Kerala government. The LIFE Mission programme is aimed at providing houses for families without land or houses. A UAE-based charitable organisation called Red Crescent had signed an MoU with the Kerala government to build 140 flats for the project. Swapna Suresh said she was paid Rs 4.48 crore as commission by Unitac Builders, which got the contract to execute the project.
The ED quickly acted on this revelation and named Sivasankar as an accused in the PMLA case after interrogating him for more than 100 hours. The CBI found that Unitac violated FEMA while receiving UAE dirhams equivalent to Rs 18 crore for the project. It filed an FIR naming Unitac MD Santhosh Eapen and another employee and government officials involved in the project. More than the gold smuggling case, it was the LIFE Mission scandal that turned out to be a major embarrassment for the Pinarayi Vijayan government.
The CBI’s investigation hit a roadblock after the Kerala High Court granted a stay against the agency probing the involvement of Kerala government employees in the scam under the Prevention of Corruption Act. The CBI, however, is free to investigate foreign exchange violations in the case.
With the government facing a serious crisis of credibility, there were discussions within the ruling CPI(M) about facing the Assembly elections under a new chief minister. A natural choice to replace Pinarayi Vijayan would have been CPI(M) state secretary Kodiyeri Balakrishnan, although he is suffering from cancer. But Kodiyeri’s prospects suffered a major setback after his son, Bineesh, was arrested by the ED under provisions of PMLA for alleged financial transactions with a suspect arrested by the Narcotics Control Bureau for peddling drugs in Bengaluru. The suspect, Anoop Muhammed, told the NCB that Bineesh financed his businesses.
The NCB arrested Bineesh on November 17. The ED has found that Bineesh recently transferred Rs 50 lakh to Anoop’s account and the duo had conducted transactions worth Rs 5.50 crore in the past six years. An ED team raided Bineesh’s house in Thiruvananthapuram and found Anoop’s debit card there, but Bineesh’s wife said the raiding party put it there to implicate him. On November 13, Kodiyeri took leave from the party secretary post, citing health concerns.
Kerala Higher Education Minister K.T. Jaleel is also under the crosshairs of the Central agencies. He was interrogated by the ED, NIA and the Customs on a range of issues such as the import of copies of the Quran and food kit from the UAE without permission from the Union government, his visits to UAE consulate and his phone calls with Swapna Suresh. Jaleel is also facing scrutiny for seeking Swapna Suresh’s help to get a man accused of defaming him on social media deported from the UAE, skipping proper channels.
The ongoing investigations could end up causing a diplomatic earthquake if it is shown that someone from the UAE consulate was involved directly in the gold smuggling and the LIFE Mission scams. Central agencies are closely monitoring Khalid Ali Shoukri, an Egyptian citizen who was the head of the financial division at the UAE consulate in Thiruvananthapuram. The NIA also suspects the involvement of underworld don Dawood Ibrahim in the smuggling case, which is being investigated under UAPA.
Considering the gravity of the situation, other than the Customs, NIA, ED and the CBI, other Central agencies like the IB, Military Intelligence, Income Tax Investigation Wing, Revenue Intelligence, Economic Intelligence Council, Central Economic Intelligence Bureau and Research and Analysis Wing are said to be involved in the investigation and are reporting to Doval.
The ED has found that Sivasankar leaked sensitive information regarding many of the government’s important projects to Swapna Suresh and her accomplices even before those were discussed in the cabinet. Subsequently, the LIFE Mission project, the K Phone project aimed at providing cheap internet service to the poor, the Kochi Smart City project and the expansion of Technopark in Thiruvananthapuram are now being scrutinised by Central agencies.
The ED’s inquiry into the LIFE Mission project is facing a serious pushback from the Kerala government. A CPI(M) MLA moved a privilege motion, alleging that the ED’s inquiry halted the government's project to provide free housing for the poor. After the Privileges and Ethics Committee of the Kerala Assembly sought an explanation, the ED said it had not tried to intervene in the power of the Assembly in any manner and that it had the legal authority to ask for the files related to the project as the financial transactions were suspicious.
The Pinarayi Vijayan government is beefing up its defences against Central agencies. It is fighting the FCRA cases being probed by the CBI and has revoked the general consent required by the CBI for probing cases in the state.
Political impact
Unfortunately for the government, the main issue dominating the upcoming local body polls is not the COVID-19 pandemic, but how the chief minister’s former principal secretary and the former party secretary’s son are in jail on grave charges. Another major blow for Pinarayi Vijayan came when the ED issued a summons to his additional private secretary, C.M. Ravindran. He has managed to avoid being questioned as he was tested positive for COVID-19, but the ED plans to question him and Sivasankar together.
The BJP holds the chief minister accountable for the crisis and says that the IT company owned by his daughter has financial connections with the accused in the smuggling case. But it is yet to furnish any proof to substantiate the charges. The CPI(M) says the allegations are part of the BJP’s attempt to overthrow a duly elected government using Central agencies and blamed the Congress-led opposition in the state for trying to take advantage of the situation.
But the BJP, too, failed to handle the situation properly. Minister of State for External Affairs V. Muralidharan claimed in a news conference that the gold was not smuggled through diplomatic baggage, and that the accused used fake labels to disguise the consignment as having diplomatic status. The minister’s claim was disproved after the consulate itself conceded it was the intended recipient of the baggage and claimed diplomatic immunity for it. But Muralidharan’s allegations gained some traction after investigating agencies seized a fake seal and letter head of the consulate from the first accused, Sarith. The BJP suffered another setback after it became public that a leader of the RSS-affiliated trade union BMS intervened on behalf of the accused and that the head of a pro-BJP television channel advised Swapna Suresh to claim that the gold was seized from a parcel meant for private use.
Also under the purview of the NIA investigation is the African connection of the accused in the smuggling case. The agency has found that K.T. Ramees, one of the key accused, made several trips to African countries with gold mines and also visited weapons factories in some of these places. Ramees was earlier implicated in a case involving illegal transfer of weapons. The agency is also examining whether the accused used diplomatic baggage for drug trafficking.
Meanwhile, two confidential depositions by Swapna Suresh and Sandeep Nair, the fourth accused in the smuggling case, could be crucial. There are reports that Sandeep might turn approver in the case. The Customs has registered a new case related to the alleged smuggling of foreign currency to the tune of $1.9 lakh (Rs 1.4 crore) to the UAE. Swapna Suresh and Shoukri were said to be behind the operation and the alleged role of Sivasankar is also being investigated.
The effective handling of the initial stages of the COVID-19 pandemic had raised the political stock of the Pinarayi Vijayan government and had significantly enhanced its popularity, prompting political observers to predict a second consecutive term, something which has never happened in Kerala. But corruption charges against senior officials in the CMO have hurt and soon turned the picture on its head, immediately putting the government on the defensive.
Unsurprisingly, with the local body elections announced and the Assembly elections coming up, the solar scandal, which was among the key reasons that brought Pinarayi Vijayan to power in the last elections, has been revived. There are indications that several senior opposition politicians could face arrest in the days to come.
