Kochi: The probe proposed by the Income Tax (IT) Department on the case against Cochin Minerals and Rutile Limited (CMRL), was based on a statement by the CMRL’s Chief Finance Officer (CFO). In the case, the chemical company was accused of spending illegal payments of Rs 135 crore from 2016 onwards to politicians, trade union leaders, police, and other officials.

The probe was recommended by the IT department to the Serious Fraud Investigation Office (SFIO), a statutory corporate fraud investigating agency in India, which functions under the Ministry of Corporate Affairs.

As the CFO said to the IT officers, CMRL had spent a huge amount of money to suppress protests against it. According to the protestors, large-scale mining of black soil (Ilmenite) done by CMRL along coastal areas causes severe environmental impacts like coastal degradation and loss of biodiversity.

The black soil deposit along the coast of Chavara in Kollam is the main raw material used for the production of Titanium Sponge metal by CMRL. The chemical company received these materials by “illegally bribing” the political leaders, officials, and others, the statement by the CFO added. This prompted the Interim Settlement Board (ISB) of the Income Tax Department to recommend a probe by the SFIO.

CMRL is also engaged in the export of synthetic rutile, manufactured by upgrading the Ilmenite ore processed from black soil. The Chavara-based Kerala Minerals & Metals Ltd (KMML) is another public company that produces Titanium Sponges using Titanium Tetro Chloride by processing Ilmenite. In 2013, complaints were raised against CMRL as it was receiving more quantity of unprocessed Ilmenite than that of what KMML had been receiving. 

The Bengaluru and Chennai regional directors in the office of the Director General of Corporate Affairs are currently tasked with the investigation. SFIO will take over the probe into the case if the Director General of Corporate Affairs reports that the documents and statements found by the ISB are factually correct.

The case is based on the documents seized from the residences of CMRL MD S N Sasidharan Kartha and key officials as well as their statements during the Income Tax raid on January 25, 2019.