What is the CMRL case and why did ED raid properties associated with former CM Pinarayi Vijayan in Kerala under PMLA? | Today’s news

The Enforcement Directorate (ED) on Wednesday raided 10 locations in Kerala under the Prevention of Money Laundering Act (PMLA) as part of its probe into the Cochin Minerals and Rutil Limited (CMRL) case, including properties linked to former chief minister and opposition leader Pinarayi Vijayan.

According to officials, the search began early in the morning and was initiated on the basis of intelligence relating to persons allegedly involved in questionable financial transactions in the CMRL case, which created a major political controversy in Kerala during the Vijayan government.

The agency’s move followed the Kerala High Court’s decision on Tuesday to reject pleas to stay the ED’s probe into the matter.

Speaking to reporters after ED officials completed several hours of searches at his rented residence in Bakery Junction in connection with the alleged CMRL monthly payments case, Pinarayi Vijayan said the action would not undermine him or the CPI(M).

“This is just the beginning. No one should be under the illusion that such actions can intimidate or weaken us,” he said.

The case of CMRL

The case came to light in 2023 following income tax raids on CMRL during the tenure of former Kerala Chief Minister Pinarayi Vijayan. Investigators said the company almost paid up ₹1.72 million in 2017-18 and 2018-19 to Exalogic Solutions, an IT firm linked to Veena T, on deals related to software development, management and consultancy services, according to an Indian Express report.

According to the Income Tax Department, Exalogic did not provide any of the services for which the payments were made. The ministry’s Interim Settlement Board later described the transactions as “illegal payments”, the report said.

The CEO of CMRL allegedly made illegal payments to politicians, political parties, police officers, media organizations, journalists, trade unions and others allegedly to facilitate the smooth functioning of the company’s operations.

The matter came before the Interim Settlement Board after CMRL and its promoter Kartha filed a settlement application following an Income Tax raid in 2019 during which officials allegedly unearthed payments to several entities unrelated to the company’s business activities.

Subsequently, the ED launched a money laundering investigation and questioned company officials, while the Serious Fraud Investigation Office (SFIO) under the Ministry of Corporate Affairs launched a separate probe into Exalogic Solutions and CMRL’s wider financial transactions.

During the investigation, officials alleged that large payments were made to several politicians whose identities were allegedly concealed through abbreviations in documents seized during income tax searches. According to investigators, the alleged recipients were connected to various political parties.

The SFIO probe later estimated the alleged profits Exalogic received at nearly ₹2.73 million.

The income tax proceedings alleged that the payments were wrongly booked as business expenses even though no services had been rendered. The SFIO’s investigation later expanded to examine CMRL’s wider financial transactions, while the ED probed whether the alleged deals generated proceeds of crime under the PMLA.

However, investigators have not publicly presented evidence in court to show that the alleged payments were linked to bribery or personal financial gain, the report said.

What is CMRL?

Founded in 1989, CMRL commenced commercial production in 1993 as an export-oriented company using ilmenite-rich mineral sand sourced from the southern coast of Kerala as its key raw material.

Its primary product is synthetic rutile, which is primarily used in the production of titanium sponge. The company also produces ferric chloride, a chemical used in seawater desalination, wastewater treatment, iron compound production, industrial wastewater treatment from industries such as textiles, paper mills and refineries, as well as in the pharmaceutical industry.

CMRL also produces ferric chloride for the treatment of waste from tanneries, textile and dyeing units and breweries. Another product, Cemox, is used in the brick, tile and cement industries as an additive to reduce reliance on natural clay.