KOCHI: The Registrar of Companies (ROC) of Kerala, in a damning affidavit submitted to the High Court, said that Kerala State Industrial Development Corporation’s (KSIDC) conduct in the purportedly illicit financial transaction involving Cochin Minerals and Rutile Ltd (CMRL), a company in which it holds a minority stake, and Exalogic Solutions, an IT firm owned by CM’s daughter T Veena, has raised concerns of negligence and potential attempts to conceal wrongdoing.
“Contrary to proving its bona fide, KSIDC appears to have exposed its link to the suspicious and mala fide circumstances about the transactions of CMRL,” ROC stated in the affidavit filed on Thursday in response to a petition filed by KSIDC challenging the Serious Fraud Investigation Office’s (SFIO) investigation into the affairs of CMRL, KSIDC, and Exalogic Solutions Private Ltd.
The ROC presented an RTI response as evidence of KSIDC’s inconsistent stance. The RTI reply issued on October 27, 2023, revealed that KSIDC had not received any response from CMRL to the letter seeking an explanation regarding the alleged illegal financial deal.
Similarly, the reply provided to ROC on January 3, 2024, also lacked any information regarding the receipt of a reply or clarification from CMRL. However, KSIDC has now stated before the Kerala High Court that it received a reply from the managing director of CMRL on September 9, 2023.
“This is intriguing, as KSIDC itself stated in the RTI reply that it had not received any response from CMRL until October 27 of last year,” the affidavit points out.
The ROC further asserts that CMRL had disclosed information regarding the Income Tax raid during its 161st board meeting on February 11, 2019. However, KSIDC discussed this matter in its board meeting much later, on February 2, 2024, and it demanded a forensic audit of CMRL only then. This action is deemed an afterthought and a belated attempt to portray that KSIDC took some action. The discussions in the board meetings unveil the shortcomings in the corporate governance structure of KSIDC, especially considering its reliance on public funds.
The affidavit highlights that the books of accounts of CMRL were seized for the first time on January 25, 2019, yet KSIDC’s initial response came only on August 14, 2023. This significant and unexplained delay itself raises doubts.
The affidavit also reveals that KSIDC has investments in 224 ventures in Kerala and holds equity in 73 companies.
No clarifications
RTI reply given to ROC reveals that KSIDC did not receive any response from CMRL to the letter seeking an explanation regarding the alleged illegal deal
Reply also lacked any info on the receipt of a reply or clarification from CMRL