ED Probes CMRL Auditors, Vendors in ₹182-Crore Kerala Fraud Case

The Enforcement Directorate has widened its investigation into Cochin Minerals and Rutile Limited (CMRL), looking at whether auditors and transport vendors helped the company's managing director inflate expenses by ₹182 crore. The probe follows a Serious Fraud Investigation Office report that details how SN Sasidharan Kartha, the MD, allegedly misrepresented costs and colluded with third parties to move money out of the company.

A key thread in the SFIO report involves payments to an IT firm owned by Veena T, daughter of a former Kerala chief minister. Investigators are tracing whether those payments were a conduit for funds that originated from the inflated transport bills. The ED is also examining whether the auditors signed off on the misstated expenses or missed red flags that should have triggered a deeper review.

The case centers on CMRL's transport contracts. The SFIO alleges Kartha worked with vendors to submit invoices for services that were either not delivered or priced well above market rates. The inflated charges were then booked as legitimate operating expenses, reducing taxable income and creating a pool of cash that could be redirected. The ED wants to know how much of that ₹182 crore ended up outside the company's books and who authorized the payments.

CMRL is a Kerala-based mineral sands producer that processes ilmenite and rutile. The company has been under regulatory scrutiny since 2022, when the SFIO began looking into its financial statements after a whistleblower complaint. The ED's money-laundering angle adds criminal liability to what was previously a corporate governance investigation.