Kochi: The Enforcement Directorate’s probe into the alleged irregularities in the financial dealings between Cochin Minerals and Rutile Limited (CMRL)-Exalogic Solutions Pvt Ltd is widening into a more crucial phase, with the agency examining possible Foreign Exchange Management Act (FEMA) violations against Pinarayi Vijayan’s daughter T Veena and scrutinising whether money from the wider financial trail was used for her husband and MLA PA Mohammed Riyas’ 2021 Assembly election campaign. Sources said the ED is likely to question Veena and may summon Riyas too for interrogation in the coming days.

The developments sharpen the political stakes of a case that began with the ₹2.78-crore payment by CMRL to Veena’s Exalogic Solutions. The probe is now looking beyond that payment at where the money went, who handled it and whether any of it reached the political sphere.

The ED conducted searches at nine premises in Kozhikode on Tuesday. The searches followed its earlier seizure of handwritten accounts maintained by Veena and other digital evidence. According to the ED, the handwritten accounts contain details of around ₹20.05 cr in Indian rupees and AED 3.49 lakh, about ₹85 lakh, transferred to Dubai. The agency also said it found evidence of hawala transfers during the latest searches.

ED sources said the Dubai transactions are being examined for possible violations under the Foreign Exchange Management Act. Further summons, including to Veena, are expected after the seized material is analysed.

The original ED case centred on the allegation that CMRL paid ₹2.78 crore to Exalogic under the guise of IT consultancy services despite, according to investigators, no corresponding services being rendered. But the latest seized materials give the agency a much larger financial trail to chase.

The ED said Veena’s handwritten notes seized during its May 27 search contain names, amounts handled or spent and details of money sent to Dubai. The agency claims the amounts recorded in the accounts are over and above the money Veena received from CMRL and indicate that she was handling funds beyond her known sources of income.

The agency has also alleged that CMRL management generated ₹182 crore in fictitious cash expenses over 15 years, which were allegedly used to pay bribes. The ₹2.78 crore paid to Exalogic was identified by the ED as one such fraudulent payment.

The Dubai component could prove particularly troublesome for Veena. If investigators establish that the foreign transactions violated FEMA, she could face a separate layer of legal scrutiny alongside the ongoing PMLA proceedings.

The ED has also flagged an unusual digital trail. Digital devices seized from Veena allegedly contained a photograph of a SIM card registered in another person’s name. According to the agency, the SIM was used in a Wi-Fi router and may have used internet-based calls in connection with the foreign transactions.

The ED suspects the arrangement may have been used to communicate through a proxy identity. The agency said the person who provided the SIM card, along with all those named in Veena’s handwritten accounts, were covered during the August 18 searches.

The finding adds another strand to the probe as the investigators are no longer merely examining bank transactions but are trying to identify the people and channels through which the money and communications moved.

Riyas’ poll campaign under ED radar
The most politically sensitive development, however, is the ED’s scrutiny of Riyas’ 2021 election campaign expenditure. Investigators are examining transactions involving Solus, an advertising firm linked to CPM Kozhikode district secretariat member P Nikhil, and other people in Riyas’ circle. The ED’s August 19 press release does not accuse Riyas of receiving illegal money or say that his campaign was funded with proceeds of crime. That link remains under investigation.

But sources indicate that Riyas may be summoned for questioning as investigators attempt to establish whether money from the CMRL-Exalogic trail reached persons or entities involved in his election publicity and expenditure.

That would significantly raise the political temperature. Until now, Riyas has largely been defending his wife and attacking the ED’s action as politically motivated. A summons would require him to answer questions about the financial trail himself.

Can CPM’s ‘political vendetta’ defence hold?
This is the question that now hangs over the CPM. The party’s principal defence throughout the controversy has been that the ED probe is part of a political vendetta against Pinarayi Vijayan, former CM and current Opposition Leader, and his family.

CPM state secretary MV Govindan has maintained that the central agency is deliberately attempting to drag Riyas into the case and create an anti-CPM narrative.

That argument will not disappear merely because the ED has conducted searches. An investigation is not proof of guilt, and the agency will ultimately have to establish its allegations with evidence. But the latest phase makes the political-vendetta defence harder to deploy as the only response.

The ED is now citing specific seized material including handwritten accounts, Dubai transactions, alleged hawala evidence and a proxy SIM arrangement. It is also examining financial dealings around Riyas’ election campaign.

The question for the CPM is therefore becoming sharper: Can every new piece of evidence be dismissed as political targeting without addressing the financial trail itself?

A headache for Pinarayi and the LDF
The political discomfort extends beyond Riyas. For Pinarayi Vijayan, the case already carries a direct family connection because the original allegation concerns payments to his daughter’s company. The opposition has alleged that the CMRL payments were linked to the then Chief Minister’s influence, an allegation Vijayan has rejected.

If investigators now establish a credible connection between the financial trail and Riyas’ election expenditure, the probe could move from Veena’s corporate dealings to the political finances of her husband, placing the Chief Minister’s family at the centre of a wider investigation.

There is also a potential problem within the Left alliance. When asked about the raids and latest findings, CPI state secretary Binoy Viswam said on Thursday that “left-wing politics is separate and business is separate.”

The remark is significant. The CPM may continue to defend Vijayan using the ‘politically-motivated’ narrative and attack the ED’s methods, but coalition partners may be less willing to assume collective political ownership of every allegation surrounding CMRL and Exalogic.

The case has therefore acquired three distinct pressure points. For Veena, possible FEMA action, the ₹20.05-crore handwritten accounts, the ₹85-lakh Dubai trail and alleged hawala transactions could substantially widen her legal exposure.

For Riyas, a possible summons over his 2021 election campaign could pull him directly into an investigation that has so far centred primarily on his wife. For Pinarayi Vijayan and the CPM, the political challenge is to maintain the 'vendetta’ argument while simultaneously answering questions arising from a financial trail that the ED says it has uncovered and is now tracing.