The Chief Judicial Magistrate (CJM) court, Thiruvananthapuram, has allowed the Central Bureau of Investigation (CBI) to prosecute four former top officials of Kerala Cashew Development Corporation Ltd. (KSCDC) and a businessperson on charge of cheating and conspiracy to defraud the exchequer in the procurement of raw cashew during the 2006-15 period.
The agency has named K.A. Ratheesh, former managing director, KSCDC, E. Kasim, former chairman, and R. Chandrasekharan, former chairman, as the main suspects of the alleged multi-crore fraud.
The CBI’s case is that they had conspired with one Jaimon Joseph, proprietor of M/s JMJ traders, and “unknown others” to defraud the public exchequer of ₹500 crore during the tenure of two successive governments. The court has ordered the accused to appear before the CJM on March 28.
In October last, the Pinarayi Vijayan government had refused sanction for the CBI to prosecute the suspects on the charge of corruption. It was an extension of the government’s decision in March to withdraw the general consent accorded to the CBI to operate in Kerala voluntarily. It had invoked the Delhi Special Police Establishment (DSPE) Act, which governs the CBI, to bridle the agency’s operational independence in the State.
The government had said the law clearly stated that law and order and crime investigation were State subjects. The CBI could probe local cases or chargesheet suspects only with the permission of the State administration. The unique situation had compelled the CBI to push charges of conspiracy and cheating against the accused, instead of charges under the Prevention of Corruption Act, which required State sanction.
Rules violated
The CBI’s case is that the KSCDC officials, all high ranking political appointees, had “dishonestly awarded the contract for supplying raw cashew” to Mr. Joseph’s firm “to cheat the corporation.” The accused had violated store purchase rules and other procurement procedures laid down by the State government in the process.
In 2012-13, the KSCDC sourced 92.07% of its total raw material procurement from Mr. Joseph’s firm. The “low-quality cashew” was procured at “higher than market rates,” causing substantial financial loss to the corporation and “corresponding gain to M/s JMJ traders,” the CBI said.
