CMRL pay-off case: ED says Kartha admitted Veena was paid due to relation with Pinarayi Vijayan

Kochi: An ED document citing the statement by Cochin Minerals and Rutile Ltd. (CMRL) Managing Director SN Sasidharan Kartha has surfaced, worsening things for former Chief Minister and current Opposition Leader Pinarayi Vijayan and his daughter Veena T in the CMRL-Exalogic case. In the document, the ED cites Kartha’s statement, as per which he allegedly admitted to the agency that payments to Veena and her firm were made because of the ‘personal relationship’ with her father, Pinarayi Vijayan, the then Kerala CM.

The statement, recorded under Section 50 of the Prevention of Money Laundering Act (PMLA) and submitted by the ED reportedly before the PMLA Adjudicating Authority, forms part of the agency’s effort to attach and eventually confiscate assets allegedly derived from proceeds of crime. The ED is relying on Kartha’s deposition to support its allegation that the ₹2.78 crore paid to Veena and her Bengaluru-based company, Exalogic Solutions Pvt. Ltd., was not for genuine IT or consultancy services but was routed under the guise of legitimate business transactions.

According to the ED, Kartha made the statement during questioning conducted at his Aluva residence on April 17, 2024.

“Mr S N Sasidharan Kartha, in his statement dated 17.04.2024 recorded under Section 50 of PMLA, admitted transferring funds to vendors, cash withdrawal, and return to him or aides without genuine expenses. He also admitted payments to Smt Veena T and M/s Exalogic Solutions Pvt. Ltd., without services, considering personal relationships with the then Chief Minister of Kerala Shri Pinarayi Vijayan”, the report said.

The ED contends that the statement directly supports its allegation that the payments to Exalogic were sham transactions lacking any genuine commercial purpose. The agency has also stated that Veena was unable to substantiate or produce evidence of software, ERP implementation, consultancy reports or any other tangible deliverables allegedly provided to CMRL in return for the payments.

According to the ED, CMRL transferred ₹2.78 crore to Exalogic Solutions under the guise of Enterprise Resource Planning (ERP) implementation and IT consultancy services.

Investigators, however, claim no software, consultancy services or work products were delivered to CMRL in exchange for the payments.

The agency has further questioned Exalogic’s financial credentials, stating that the company had a negative net worth of ₹66 lakh and a standalone turnover of only ₹5 lakh, making it heavily dependent on payments received from CMRL.

The ED has also cited a ₹50 lakh loan extended to Exalogic by Empower India Capital Investments Pvt. Ltd. (EICPL), a non-banking financial company owned by Kartha, despite Exalogic's alleged inability to satisfy normal commercial lending parameters.

The allegations regarding Exalogic form part of the ED’s broader money laundering investigation into alleged financial irregularities at CMRL.

Based on findings of the Serious Fraud Investigation Office (SFIO) and its own investigation, the ED has alleged that nearly ₹182 crore was siphoned from the company over a period of more than 15 years. According to the agency, around ₹139 crore was fraudulently booked as fictitious expenditure under heads such as sludge handling and transportation expenses using self-generated vouchers without genuine invoices or supporting documents.

Another ₹43 crore, the ED alleged, was siphoned off through inflated invoices raised by known vendors, who allegedly withdrew the excess amount in cash and returned it to Kartha and other company officials after deducting commissions. The agency has described the arrangement as a circular flow of funds originating from CMRL’s bank accounts and eventually finding their way back in cash to company insiders.

Following court orders permitting proceedings under the PMLA, the ED conducted searches on May 27, 2026, and froze several bank accounts under Section 17(1-A) of the PMLA. The ED froze an HDFC Bank account of Veena Thaikkandiyil with a balance of ₹1,37,088, besides freezing ₹15,57,414 in an HDFC Bank account of Laker India Corp. and ₹27,585 in an HDFC Bank account of Exalogic Solutions Pvt. Ltd. (OPC).

Overall, the ED has frozen assets worth approximately ₹29 crore belonging to 12 accused individuals and entities, including nearly ₹26 crore linked to CMRL, its directors and their family members.

The ED has now placed Kartha’s statement, investigation records and details of the frozen assets before the PMLA Adjudicating Authority, which is expected to issue notices to all 12 accused individuals and entities, giving them an opportunity to present their defence before deciding whether the frozen properties should be confirmed for attachment and eventual confiscation under the PMLA.

The proceedings are also expected to pave the way for the ED to file its prosecution complaint before the designated PMLA court.