ED arrests former Kerala top bureaucrat again: What is the LIFE Mission case, what charges Sivasankar faces

Charity offers money for flood relief

Livelihood Inclusion and Financial Empowerment (LIFE) Mission, one of the flagship projects of the CPI(M) government in Kerala, was envisaged to provide low-cost houses to the poor.

After the devastating floods of 2018 in the state, a UAE-based charitable organisation called Red Crescent, which is part of the Red Cross International humanitarian network, approached the UAE Consulate in Thiruvananthapuram, offering to donate Rs 20 crore for rehabilitating the flood victims. Swapna Suresh, a key accused in the gold smuggling scandal, was then executive secretary at the Consulate, which took up the matter with Sivasankar.

The money goes to LIFE Mission

It was decided to use the Red Crescent money in the LIFE Mission project, to construct an apartment complex with 140 units and a healthcare facility at Wadakkanchery municipality in Thrissur. A Memorandum of Understanding (MoU) was signed on July 11, 2019, between LIFE Mission officials and the representatives of Red Crescent, in presence of CM Vijayan, Sivasankar and officials of the UAE Consulate.

Anil Akkara, the Congress MLA fromWadakkanchery, had then claimed that only six people in the area had lost dwellings in the floods and they had been rehabilitated before this scheme was launched.

Allegations of kickbacks

The ED has alleged that bribes were paid in the awarding of the project to Unitac Builders and Developers Private Limited and Sane Ventures LLP, run by Santhosh Eappen, with the involvement of Suresh and Sivasankar.

The ED has stated that Unitac Builders paid a kickback of Rs 4.5 crore to middlemen, including state representatives and government officials. Santhosh Eppen confessed to paying the amount.

Probe by Kerala Vigilance and CBI

It was during the probe into the gold smuggling case that Swapna Suresh talked about the bribe deal in the LIFE Mission project. In September 2020, three months after the gold smuggling case broke, the LIFE mission scam emerged on the sidelines.

Then central agencies, such as Customs, ED and NIA were already probing various crimes associated with gold smuggling. As the new scandal emerged, the Kerala government immediately ordered a Vigilance probe into the alleged bribery, apparently to stymie the probe by central agencies. However, by the end of that month, the CBI filed an FIR for alleged FCRA violations in the case, over the acceptance of external aid without consent from the Centre.

The case was initially registered against Unitac Builders and Sane Ventures LLP under various provisions of the Prevention of Corruption Act and Section 120B of the IPC (criminal conspiracy). Sivasankar, Swpana Suresh, PS Sarith, Sandeep Nair and Santhosh Eappen were listed as the accused.

Kerala opposes CBI probe

The Kerala government moved the High Court seeking quashing of the CBI FIR, saying that the probe would infringe upon the powers of the state and go against the federal structure. The HC rejected the plea in January 2021. The state then approached the Supreme Court seeking a stay against the CBI probe. But in February 2022, the apex court allowed the CBI to continue the probe.

However, neither the CBI investigation nor the State Vigilance probe managed to make much headway.

ED steps in

The ED’s LIFE Mission case stems from the FIRs of the CBI and the State Vigilance. The ED brought the issue under the gambit of money laundering on the grounds that the offences under the Prevention of Corruption Act and IPC 120 B are scheduled offences under part A of the Schedule to the Prevention of Money Laundering Act, 2022.

Another ED case against Sivasankar

The ED had arrested Sivasankar in October 2020 too, on charges of helping Swapna Suresh park proceeds to the tune of Rs 30 lakh from the gold smuggling deal.

The ED had then alleged that Sivasankar had prompted chartered accountant Venugopal Iyer to open a joint bank locker with Suresh. Sivasankar monitored the money in this locker, and the CA allegedly kept him informed about each transaction in the account. Besides, Sivasankar had allegedly helped Swapna convert a part of the black money to foreign currency and smuggle it to the UAE. To support this allegation, the ED produced purported WhatsApp chats between Sivasankar and Suresh last week in the PMLA court in Kochi.

The ED had also alleged that Sivasankar and Suresh received kickbacks from Unitac Builders. Sivasankar, meanwhile, had told the investigating agencies that Suresh was not financially well-off after she lost her UAE Consulate job, and that he had tried his best to help her and also found her a job.

Dollar smuggling case

Apart from the two ED cases, Sivasankar faces another Customs case over the smuggling of USD worth Rs 1. 30 crores to the UAE, allegedly by a former financial head at the UAE Consulate. Customs had recorded Sivasankar’s arrest in January 2021, when he was remanded in jail in the ED case.

The gold smuggling case, where it all began

The gold smuggling scandal was exposed on July 5, 2020, with the seizure of 30 kg of gold from diplomatic cargo at the Thiruvananthapuram airport. Customs had found that through the racket, allegedly involving Swapna and others, 168 kg of gold had been smuggled inside diplomatic cargo on 21 occasions over a year until then. Customs, NIA, ED and CBI had all registered cases, looking into various aspects of the scandal.