The Kerala chief minister, Pinarayi Vijayan, has many firsts to his credit. He is the state’s only leader to be sworn in as chief minister twice in a row. In 2021, under his leadership, the Communist Party of India (Marxist) returned to power for a consecutive second term for the first time in the state’s then 65-year-long history. Vijayan has helmed India’s only communist-led state government for the last eight years even as the CPI(M) lost its former bastions of West Bengal and Tripura. Vijayan has also served as the CPI(M)’s state secretary for a record 18 years.
But there are also some dubious records in the name of the Marxist veteran. No other communist leader from the state has been embroiled in so many serious cases of corruption and nepotism. In 2009, he became the first CPI(M) politburo member to become an accused in a corruption case when the Central Bureau of Investigation arraigned him as the ninth accused in the Rs 375 crore Lavalin scandal. This was related to the controversial contract awarded to the Canadian company, SNC-Lavalin, to renovate three hydropower stations while Vijayan was the state power minister in 1995. Although a special CBI court acquitted Vijayan in 2013 — the Kerala High Court did the same in 2017 — the CBI’s appeal is still pending in the Supreme Court.
In February 2023, Swapna Suresh, the prime suspect in a gold-smuggling case, accused Vijayan of having benefitted from various corrupt deals with her. In October 2020, the Enforcement Directorate arrested Vijayan’s principal secretary and senior IAS officer, M. Sivasankar, for alleged links with Suresh. Even though the ED and the National Investigation Agency investigated the case and arrested all the accused, no charge against Vijayan has been proven.
The latest bombshell is the case related to allegedly illegal payments made by a private firm to many prominent Kerala politicians from different parties, including Vijayan and his daughter, Veena Thaikkandiyil, who is also the wife of the state tourism minister, P.A. Mohammed Riyas. The case is being probed by the Serious Fraud Investigation Office under the Central ministry of corporate affairs. Veena’s writ petition seeking to quash the investigation was dismissed on February 16 by the Karnataka High Court. As directed by the court, Veena appeared before the SFIO, Chennai, on February 19. The investigation was based on an interim inquiry report submitted by the Registrar of Companies, Bengaluru. The CPI(M) has dismissed it as part of Central agencies’ operations to tarnish leaders opposed to the Bharatiya Janata Party. The Opposition United Democratic Front and the BJP have demanded Vijayan’s resignation.
This case tumbled out last June with an order of the New Delhi bench of the income tax department’s Interim Board for Settlement which contained many damning observations. The order was a response to the application filed by a private chemical company, Cochin Minerals and Rutile Limited, based in Ernakulam, following a search by income tax officials of the company offices and of residences of its top executives in 2019 that revealed many illegalities. According to the IBS, Exalogic Solutions Limited, a company registered in Bengaluru and owned by Veena, a software engineer, received Rs 1.72 crore during 2017-20 from CMRL without providing any services in return. ESL (declared dormant since 2022) had claimed that the payment was made for its software services. But according to the order, CMRL executives revealed they did not know about any services provided by Veena’s company. Exalogic also received unsecured loans, amounting to Rs 78 lakhs, during 2017-20 from a financial firm connected to CMRL. IBS mentioned that CMRL did not reveal that Veena was “the daughter of a prominent politician to whom other payments were made by the assesse’s own admission.” The “other payments” were related to CMRL doling out about Rs 135 crore to different political leaders, media organisations, police and so on for what the company said were payments to “overcome threats” to its business activities. In the seized documents, the alleged recipients were mentioned in abbreviations such as PV, OC, RC, KK and so on. According to IBS, CMRL officials revealed the abbreviations stood for Pinarayi Vijayan, the late former chief minister, Oommen Chandy, the Congress leader, Ramesh Chennithala, the Muslim League leader, P.K. Kunhalikutty, and others. The IBS order soon surfaced in the media, triggering a political storm. While UDF leaders admitted to receiving money as donations for their political parties, Vijayan dismissed the charge as baseless. “My hands are clean,” he said in the state assembly.
CMRL, incorporated in 1989, is a public limited private chemical company manufacturing and exporting synthetic rutile, ferric chloride and other such products. With 13.41% equity in the Kerala State Industrial Development Corporation, the company reported a profit after tax of Rs 56.43 crore for the financial year, 2022-23. The IBS said KSIDC’s involvement points to the government’s shady role in the illegal transactions. CMRL came under a cloud in 2004 when a mass agitation rose against its subsidiary, Kerala Rare Earths and Minerals Ltd, which was mining the mineral-rich black sands on the Alappuzha coast. The activity, it was feared, would be environmentally disastrous for the fragile region. The agitation forced the then United Democratic Front government to cancel the mining lease it granted to KRMEL. The subsequent Left Democratic Front government reserved the rights of mining mineral sands to the public sector. KRMEL fought the decision in the high court and the Supreme Court, where it received favourable verdicts in 2016.
A Congress legislator, Mathew Kuzhalnadan, has alleged that CMRL’s payments to Veena formed a quid-pro-quo for the benefits accrued to it by the Vijayan government. He pointed out that despite deciding in KRMEL’s favour, the apex court had said that the state government was entitled to notifying mining areas exclusively reserved for public sector enterprises. However, the first Vijayan government refrained from issuing the notification. In February 2019, the Union ministry of mines barred private companies from mining rare earth minerals from beach sands. Yet, KRMEL’s lease was not revoked until the latest controversy broke out last year. Moreover, Kuzhalnadan has stated that the Vijayan government directed the Kerala Minerals and Metals Limited, a state-owned company, to extract sands containing ilmenite, a precious raw material used for making synthetic rutile, in 2019 from the Alappuzha coast in the name of flood prevention, which was then sold cheaply to CMRL, causing huge losses to the state.
Vijayan and this government have dismissed these charges. But neither has rebutted them comprehensively. With the Lok Sabha elections nearing, they could spell serious trouble for the LDF, which is already reeling under various problems, including an unprecedented financial crisis that has put its projects and welfare schemes in limbo. However, the UDF cannot breathe easy because its prominent leaders also figure in the ‘black sand diaries’. Given the record of the Central government when it comes to chasing opponents utilising investigation agencies, the UDF has much to fear from the ongoing investigation.
M.G. Radhakrishnan, a senior journalist based in Thiruvananthapuram, has worked with various print and electronic media organisations
