Veena appeared before ROC for hearing in 2022
KOCHI : The investigation by the Registrar of Companies (ROC), Bengaluru into the alleged dubious financial deal between Exalogic Solutions, owned by Chief Minister Pinarayi Vijayan’s daughter Veena T, and Cochin Minerals Rutiles Ltd (CMRL) has been going on for the past three years. The petition she filed before the Karnataka High Court revealed that Veena had appeared before the ROC once for personal hearing.
The probe was launched in 2021, and Veena appeared before the ROC on July 22, 2022, the petition said. On February 9, 2021, the ROC issued an order imposing a penalty of Rs 1 lakh each on Exalogic Solutions and director Veena for alleged violations of Section 12 of the Companies Act. Subsequently, on April 11, 2021, Veena filed an appeal before the regional director, southeast region, Ministry of Corporate Affairs, Hyderabad. Then the penalties were reduced to Rs 20,000 each, on August 19, 2021.
Despite providing relevant documents and participating in personal hearing, the ROC issued a show cause notice on August 11, 2023, claiming related party transaction in the light of the fact that the Kerala State Industrial Development Corporation (KSIDC) owns 13.4% shareholding in CMRL, and that the KSIDC acted allegedly at the directions of the chief minister, who is the father of the director of Exalogic. The ROC further sought details of transactions in respect of the service agreement with CMRL, failing which the company would be liable for prosecution under section 447 and section 448 of the Companies Act, said Veena’s petition which is with TNIE.
The company clarified that CMRL had duly deducted tax at source for services provided by it. On ROC’s allegation of related party transactions, the company clarified that KSIDC is a governmental company, and the Exalogic director was not a member of the CMRL board. “This being so, the entire attempt by the ROC to treat any transaction with CMRL as a related party transaction is legally incorrect,” it said.
Veena came to know about the petition filed by Shone George seeking a probe by the Serious Fraud Investigation Office (SFIO) into the financial deal through the media. Then she was shocked to learn from various media that an order under section 210 (1)(c) of the Companies Act had been passed by the Union government based on the report of ROC Bengaluru and Ernakulam.
According to the petition, Exalogic is a one-person company incorporated in 2014 with the ROC, Bengaluru, primarily engaged in the business of offering software services. The company, engaged by various entities to render software services, was hired by CMRL from April 2017 to May 2019. It filed a dormancy application online on November 3, 2022, and currently, is a dormant company.
In its response, the ROC informed the High Court that as per section 455 of the Companies Act and Rules framed under it, if a company has pending inquiry/inspection/investigation, then dormancy status cannot be obtained. The petitioner concedes that she came to know of the inquiry under section 206 of the Companies Act ordered by the Union government for the first time on January 29, 2021. The petitioner has rather brazenly suppressed facts and fraudulently obtained dormancy status.