Kerala CM Pinarayi Vijayans daughter moves Karnataka HC against SFIO investigation against her company

BENGALURU: Kerala Chief Minister Pinarayi Vijayan's daughter Veena Vijayan filed a petition before the Karnataka High Court seeking to quash the Centres order directing a Serious Fraud Investigation Office (SFIO) investigation against her company, Exalogic Solutions, an IT company. 

The Ministry of Corporate Affairs on January 31 issued an order handing over the probe into the affairs of Exalogic Solutions, as well as the CMRL and the Kerala State Industrial Development Corporation [KSIDC] to the Serious Fraud Investigation Office. A six-member team has been assigned to the investigation, with Deputy Director M Arun Prasad designated as the investigating officer.

As per the plea, the January order was passed under Section 212 of the Companies Act 2013, directing an investigation by the SFIO, despite the pendency of an Investigation under Section 210 of the Act.

The petitioner argued that an investigation under Section 212 of the Act cannot be ordered before the conclusion of the investigation under Section 210 [Investigation into affairs of company] of the Act.

Explaining the factual matrix in the plea, the petitioner stated that she received a communication from the Registrar of Companies Bangalore three years ago regarding an inquiry under section 206(4) of the Act to examine the transactions between CMRL and the Petitioner Company. To this, the petitioner filed responses on two different occasions, furnishing all the required documents as directed. 

Shortly, another notice was issued alleging that the documents furnished by the petitioner were improper and further directed to submit documents within 7 days failing which action would be initiated. Along with a request for a personal hearing, the petitioner submitted a reply to the ROC, along with all the relevant documents/ details as sought. Last year, the ROC issued a show cause notice alleging inter-related party transactions as KSIDC owns 13.4% shareholding of CMRL and that KSIDC allegedly acted as per the directions of Chief Minister of Kerala (the father of the director of the petitioner company). 

Later, an order as per Section 210(1)(c) of the Act was passed initiating an investigation into affairs of CMRL, KSIDC and the Petitioner.