In what is being seen as a big setback for the ruling CPI(M) in Kerala, the Enforcement Directorate (ED) on Wednesday arrested Chief Minister Pinarayi Vijayan’s former principal secretary, suspended IAS officer M Sivasankar, in connection with the case of alleged money laundering, which emerged during the probe into smuggling of gold through diplomatic cargo to the UAE consulate here.
The arrest of Sivasankar, 57, who had been a powerful bureaucrat in the CPI(M)-led government in the state in the last four years, came after ED officials questioned him for nearly seven hours on Wednesday.
Earlier in the day, Sivasankar was taken into custody from an ayurveda centre in Thiruvananthapuram, minutes after the High Court rejected his anticipatory bail plea. He had moved two bail pleas, apprehending arrest from ED and the Customs department, which are investigating different aspects behind the alleged gold smuggling case.
According to the ED, Sivasankar, who was suspended after the gold smuggling scandal emerged in July this year, had allegedly helped Swapna Suresh, a key accused in the gold smuggling case, to park the proceeds from the smuggling deal. The ED has said that Sivasankar had prompted chartered accountant Venugopal Iyer to open a joint bank locker with Swapna, who had been an executive secretary at the UAE consulate until a year ago.
While rejecting Sivasankar’s anticipatory bail plea, the High Court said, “There is indication in the communications between Sivasankar and the chartered accountant regarding the IAS officer overseeing management of the finances of Swapna Suresh…. Sivasankar may be a person involved in the money laundering with Swapna.’’
Rejecting Sivasankar’s contention that his links with Swapna were only at the official level, the court said if that was so, “there is no need for him to interfere in matters concerning management of her finances. The fact that he had intervened in the management of the finances belonging to Swapna Suresh is a situation adverse to him.”
According to ED officials, Sivasankar was arrested for helping Swapna launder black money to the tune of at least Rs 30 lakh – this was money she had allegedly received from the smuggling. The suspended bureaucrat, the agency says, was constantly monitoring money in the bank locker, and the chartered accountant 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, according to the investigating agency.
One such transaction involving foreign currency is to the tune of Rs 1.4 crore, according to ED.
The ED had said it has found WhatsApp chats between Sivasankar and Iyer, which, it said, substantiates its case against Sivasankar. He had allegedly advised Iyer to keep away from Kerala during the probe.
Venugopal has been listed as a witness in the case.
The arrest of his one-time close confidant, and once a powerful officer in the Chief Minister’s Office, is seen as a big setback for Vijayan with months to go before the Assembly polls, scheduled next year. Sivasankar was seen as having his own way in the government, thanks to his proximity with Vijayan – he is said to have kept even the Cabinet in the dark even on many critical decisions, including the controversial decision to share with a US-based firm health details of people under home quarantine for their suspected exposure to Covid-19.
The decision was later withdrawn.
The gold smuggling scandal was exposed on July 5 with the seizure of 30 kg gold from diplomatic cargo at Thiruvananthapuram airport, and has since changed the course of political debate in Kerala.
The Customs had found that the racket, allegedly involving Swapna, had smuggled in 168 kg gold through diplomatic cargo on 21 occasions over the last one year.
The scandal had served a launching pad for the Opposition to unleash a series of agitations against the government. The state government’s life mission – a housing project for the poor – had also come under the probe after it was revealed that Swapna Suresh had allegedly pocketed a kickback of Rs 4.25 crore in one of the housing projects implemented with the support of Emirates Red Crescent.
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