BENGALURU: The Union Government on Monday revealed before the Karnataka High Court that it ordered an investigation by the Serious Fraud Investigation Office (SFIO) since the Cochin Minerals and Rutile Limited (CMRL) engaged in sourcing of beach sand minerals along the Kerala coast made illegal payments to the extent of Rs 135 crore to various political functionaries of Kerala state and certain other entities, including Exalogic Solutions Private Limited (ESPL), represented by its Director Veena T, daughter of Kerala Chief Minister Pinarayi Vijayan.
The investigation is not only ordered against the ESPL but also against CMRL and Kerala State Industrial Development Corporation, the union government told the court.
This disclosure was made by Additional Solicitor General of India Arvind Kamath before Justice M Nagaprasanna during the hearing of the petition filed by ESPL, represented by Veena, questioning the order dated January 31 passed by the union government to conduct an investigation by SFIO for non-disclosure of transaction of Rs 1.76 crore paid by the CMRL for purported software service rendered by the firm.
Defending the investigation, Kamath submitted that the investigation by SFIO, a multidisciplinary agency, ordered based on the interim status report submitted by the inquiry officer of Registrar of Companies disclosing that the I-T Department cited illegal payments to the extent of Rs 135 crore to various political functionaries of Kerala State and certain other entities, including the petitioner, by CMRL. It directly affects the public interest which warrants a probe by the SFIO, he argued.
Questioning the maintainability of the petition itself, Kamath contended that there is no parallel investigation as the enquiry officers have already handed over the records to the SFIO and no interference of the court is called for in the matter at this stage. The inquiry officers of the Registrar of Companies are not authorised to access the documents with the I-T Department but SFIO is authorised and hence it was preferred to conduct investigation, he argued.
Before this, Senior counsel Arvind Datar, representing the petitioner, argued that parallel investigation by SFIO cannot be ordered under Section 212 of the Companies Act, a draconian provision, to investigate the alleged nexus between the petitioner and CMRL when already the Registrar of Companies ordered an inquiry under Section 210 of the Act on January 12, 2024.
Datar expressed the apprehension that there are chances of arresting the petitioner and attaching properties by invoking the provisions of the Prevention of Money Laundering Act and Unlawful Activities (Prevention) Act if the SFIO which is meant to investigate large-scale scams is allowed to continue with the investigation into the transaction of Rs 1.76 crore though it is not involved any larger public interest. The SFIO investigation was ordered citing the interim status report dated January 30 received from the inquiry officers on January 28, which was disclosed only now in the reply filed by the union government to the petition, he argued.
Justice Nagaprasanna reserved the order after hearing the parties.
