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Presadio and Trois Infotech, which were the main beneficiaries of the project, had begun their business operations from the same place in the same year.
Presadio Technologies Pvt Ltd had not carried out the installation of the AI cameras and setting up of control rooms, reveal documents.
Vigilance and Anti-Corruption Bureau to complete inquiry within three months.
CM rubbished the allegations of Congress over the AI camera project.
Kerala's Leader of Opposition has said the tender amount of Rs 151 crore fixed by Keltron was much more than the actual cost.
The ambitious K-FON and Safe Kerala projects are under a cloud over dubious deals, inflated project costs, kickbacks and even political favouritism.
When questioned about the corruption charges in AI-camera project and K-FON, CPM Central Committee member A K Balan suggested a response from the CM at this point would be inappropriate.
The project cost which was initially pegged at Rs 151.22 crore, rose to Rs 232 crore later as the work was sub-contracted to multiple private firms by the primary bid winner, Keltron.
James Palamuttem, the Chairman of Lyte Master Lighting India, the second firm which withdrew from the project, said that commission was demanded at the government level to be part of the project.
Kerala Government initially sanctioned Rs 1,028.20 crore for K-FON but approved a Rs 1,531.68 crore bid by Bharat Electronics-SRIT conglomerate.