High Stakes: Karnataka High Court’s Verdict on SFIO Probe Looms Large for CPM and Veena

Impending Decision Could Shift Political Landscape; CPM's Contingency Plans in the Spotlight

Kochi: The Karnataka High Court is scheduled to render an interim decision today on Exalogic’s plea to terminate the SFIO investigation. With the Lok Sabha elections approaching, this ruling could significantly impact the political scene, especially for the CPM. Concerns are coming from all sides, and the burden of explaining the Chief Minister and his daughter is getting harder to bear.

Key Points

Legal Proceedings and Concerns Raised

Scheduled for 2:30 p.m., a bench presided over by Justice M. Nagaprasanna will render an interim judgment. At the heart of the matter lies Veena, a key figure in Exalogic and daughter of the Chief Minister, who stands as the primary accused. The significance of the interim ruling cannot be overstated, mainly because of Veena’s fate. Exalogic’s counsel asserts their full cooperation with the Registrar of Companies investigation under section 210 of the Companies Act. Nevertheless, they raised concerns about the unclear rationale behind the SFIO’s investigation under section 212.

SFIO Investigation and Allegations

Meanwhile, the ROC’s investigation report highlights the irregularities within Veena’s company. The report casts a shadow of uncertainty over the proceedings. Veena’s defence hinges on the claim that her company is unaware of any simultaneous investigations. This circumstance could jeopardize their legal standing—additionally, Exalogic is concerned about potential actions, including arrests, by SFIO.

Preliminary Investigations and Court Directions

Arguing on behalf of the SFIO, Additional Solicitor General Kullur Arvind Kamath asserts that preliminary investigations reveal substantial financial malfeasance within CMRL’s transactions. Allegations include the transfer of Rs 135 crore to various political entities through CMRL without proper documentation. Additionally, there is a payment of Rs 1.72 crore to Vijayan’s Exalogic, allegedly without the corresponding services rendered.

Political Ramifications

The Assistant Solicitor General emphasizes the necessity of SFIO’s involvement in conducting a comprehensive inquiry into these transactions, given the gravity of the allegations. Following detailed arguments, the court instructed Exalogic to furnish the requested documents to the SFIO and to extend full cooperation to the investigation. Additionally, the SFIO is directed to refrain from resorting to drastic measures, including arrests, at this juncture.

Three central government agencies, the Income Tax Department’s Interim Settlement Board, Registrar of Companies (ROC), and SFIO, have probed allegations against Veena’s company. The interconnected investigations gained prominence in Kerala following the release of the Interim Settlement Board’s report.

The probe into Veena’s company commenced in November 2020 under the purview of the Karnataka ROC, with repeated summons and queries directed towards the company. However, responses to inquiries regarding the provided software assistance remained elusive. Despite assertions of GST compliance, dissatisfaction persisted. It culminated in registering a case under the Companies Act in December 2023, prolonging the investigation.

These developments, documented in the petition, underscore the ongoing ROC inquiry and challenge the necessity of an SFIO investigation. As the court deliberates on the matter, the looming prospect of entanglement for Veena intensifies, compounded by the preliminary SFIO investigation findings.

Simultaneously, preparations are underway to appeal to the Supreme Court should the verdict be unfavourable. Pinarayi Vijayan’s Quick Response Team stands poised for action. It highlights the political stakes as the CPM awaits the Karnataka High Court’s decision with bated breath.

Rohit Sharma

Rohit Sharma is a seasoned Political Journalist with a deep passion for Indian Politics. With over a decade of experience in the field, he has established himself as a trusted… More »

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