KOCHI: The Registrar of Companies (ROC) has labelled the Kerala State Industrial Development Corporation’s (KSIDC) recent call for a forensic audit of Cochin Minerals and Rutile Limited (CMRL) as a ‘face-saving’ step. The decision, taken in a February 2 meeting, comes after the issue was made public, following a probe by the Serious Fraud Investigation Office (SFIO). The ROC’s affidavit was filed in response to KSIDC’s petition challenging the SFIO probe into CMRL, KSIDC, and Exalogic Solutions Private Limited, owned by CM’s daughter T Veena.
During its 336th board meeting, KSIDC instructed its managing director to establish Standard Operating Procedures for nominee directors to report activities and issues in assisted companies and to implement a monitoring mechanism. The ROC highlighted that the board discussions exposed weaknesses in KSIDC’s corporate governance, involving public funds.CMRL’s books were seized on January 25, 2019, but KSIDC’s first response came only on August 14, 2023, raising doubts about KSIDC’s actions and justifying the SFIO probe.
The ROC emphasised that KSIDC should support the investigation rather than evade it, suggesting that the delay casts doubt on KSIDC’s narrative. The company cannot just take shelter and escape from a probe by a government agency to save its reputation before the public, rather it should aid and facilitate the ongoing investigation by the SFIO which may also be investigating the transactions that had taken place between KSIDC, especially with CMRL and come clean.
KSIDC also suppressed facts, said ROC. The complainant and BJP leader Shone George alleged that as a promotor, KSIDC is the second largest individual share holder of CMRL holding a 13.4% stake in the firm and a nominee of KSIDC was always there on the board of the CMRL. The nominee director of the KSIDC on the board should have brought the malpractices to the notice of KSIDC. The KSIDC in turn should have taken a stand against CMRL on such an event. Moreover, the misappropriation of funds in CMRL, as public money from KSIDC is also involved, amounts to the looting of the exchequer. It also impacts the general industrial development of the state, the petitioner said.