What is CMRL case and why did ED conduct raids at properties linked to former Kerala CM Pinarayi Vijayan under PMLA?

The Enforcement Directorate (ED) on Wednesday carried out raids at 10 locations in Kerala under the Prevention of Money Laundering Act (PMLA) as part of its investigation into the Cochin Minerals and Rutile Limited (CMRL) case, including properties linked to former Chief Minister and Opposition leader Pinarayi Vijayan.

According to officials, the searches began early in the morning and were launched based on intelligence inputs concerning individuals allegedly connected to the disputed financial dealings in the CMRL case, which had triggered major political controversy in Kerala during Vijayan’s administration.

The agency’s move followed Tuesday’s decision by the Kerala High Court to reject pleas seeking to halt the ED’s investigation 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 payment case, Pinarayi Vijayan said the action would not undermine him or the CPI(M).

"This is only a beginning. Nobody should harbour the illusion that such actions can intimidate or weaken us," he stated.

As per the Income Tax Department, Exalogic did not provide any of the services for which the payments were made. The department’s Interim Board of Settlement later described the transactions as “illegal payments", the report noted.

The managing director of CMRL allegedly made unlawful payments to politicians, political parties, police personnel, media organisations, journalists, trade unions and others purportedly to facilitate the smooth functioning of the company’s operations.

The matter reached the Interim Board for Settlement after CMRL and its promoter Kartha filed a settlement application following an Income Tax raid in 2019, during which officials allegedly uncovered payments made to multiple entities unrelated to the company’s business activities.

Subsequently, the ED initiated 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 dealings.

During the investigation, officials alleged that large payments had been made to several politicians, whose identities were reportedly concealed through abbreviations in documents seized during the Income Tax searches. According to investigators, the alleged recipients were linked to different political parties.

The SFIO probe later assessed the alleged gains received by Exalogic at nearly ₹2.73 crore.

The Income Tax proceedings alleged that the payments were wrongly recorded as business expenses even though no services had been provided. The SFIO probe later expanded to examine CMRL’s broader financial transactions, while the ED has been investigating whether the alleged dealings generated proceeds of crime under the PMLA.

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

Its primary product is synthetic rutile, which is mainly used in the production of titanium sponge. The company also manufactures ferric chloride, a chemical used in seawater desalination, sewage treatment, production of iron compounds, treatment of industrial effluents from sectors such as textiles, paper mills and refineries, as well as in the pharmaceutical industry.

CMRL additionally produces ferrous chloride for treating waste from leather tanneries, textile and dyeing units, and breweries. Another product, Cemox, is used in the brick, tile and cement industries as an additive to reduce dependence on natural clay.