The Left Democratic Front (LDF) government seems to have found itself at the centre of a gathering and potentially stormy political controversy swirling around the business transactions of Chief Minister Pinarayi Vijayan’s daughter and IT entrepreneur T. Veena Vijayan.
The latest scandal to beset the LDF ahead of the Puthuppally Assembly byelection on September 5 owes its provenance to an income tax disputes settlement board’s ruling in New Delhi.
The vernacular media reported that the forum disallowed a public limited mineral mining and processing company based in Kochi from claiming an input tax credit relief for payments, an estimated ₹1.73 crore, made to Ms. Veena and her IT firm for consultancy and software support services, respectively, during the 2016-20 period.
The board upheld the Income Tax department’s contention that neither Ms. Veena nor her firm had rendered any tangible service to the firm; hence, the outsize monthly payments were inexplicable and unaccountable.
Suddenly, a routine tax hearing that would have passed unnoticed metastasised into a headline-hitting political scandal amplified on television and social media platforms.
Oddly, the political fallout of the scandal seemed awkwardly double-edged.
Strikingly, the department reportedly deposed that the firm fraudulently categorised “off-the-book monthly backhanders” to a galaxy of top ruling front and Opposition politicians between 2016-20 as legitimate overhead expenses that qualified for tax exemption.
The shockwaves of the scandal picked up momentum by the minute on Wednesday. They appeared potent enough to buffet both fronts as names of across-the-aisle politicians who allegedly profited from the company’s alleged financial shenanigans slowly trickled out into the open.
Income tax enforcers raided the mining firm in 2019 and accused the promoters of inflating expenditure to claim considerable income tax relief. They pegged the firm’s “tax evasion” at ₹132.27 crore.
The Bharatiya Janata Party and the Congress waded into the controversy. Union Minister of State for External Affairs V. Muraleedharan demanded an investigation. He said the government and the Opposition banded to cut the Assembly session short to save themselves from embarrassment.
Congress legislator Mathew Kuzhalnadan said the firm’s payments to Ms. Vijayan fell under the ambit of anti-corruption laws. Kerala Pradesh Congress Committee president K. Sudhakaran demanded a judicial inquiry.
The Communist Party of India (Marxist) central secretariat member A.K. Balan dismissed media reports about the alleged scam as “agenda-driven”.
