Probe by central agencies in Kerala gold smuggling case headed nowhere

The political heat that was generated by the gold smuggling case in Kerala seems to have died down after the local body elections. But what is more intriguing is that the investigations by central agencies – the Customs Department, the Enforcement Directorate and the National Investigation Agency (NIA) looking into various aspects of the case — seem to be headed nowhere.    

The investigation by a fourth central agency, the CBI, has been stayed by the high court.

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The Customs, NIA and the ED have not been able to substantiate their charges with concrete evidence. In fact, most of the accused in the cases that had shaken the ruling Left Front due to the names of people in the administration being dragged into them, have been granted bail.  

It all started when about 30kg of gold worth Rs 14.82 crore was seized by the Customs commissionerate on July 5, 2020. The gold was allegedly smuggled through the diplomatic channel in parcels addressed to the UAE Consulate in Thiruvananthapuram.

The agencies summoned and interrogated prominent persons connected to the Chief Minister’s and Speaker’s offices, creating political turbulence. 

All the three agencies questioned M Sivasankar, the former principal secretary to the chief minister, several times. He was arrested by the Enforcement Directorate on October 28. A month later, the Customs department also recorded his arrest.

The ED and NIA summoned minister K T Jaleel and C M Raveendran, the additional private secretary to the chief minister. The Customs department summoned K Ayyappan, the additional private secretary of the Speaker.

The agencies investigated Jaleel for distributing copies of holy Koran received from the UAE Consulate. They also looked into the distribution of 17,000 kilogrammes of dates by the consulate as an expression of charity related to Eid. 

The CPI(M) and the ruling Left Front alleged that the investigations were politically motivated ahead of the assembly elections of 2021, even as the agencies went about interrogating people in the administration in connecion with the cases they had filed.

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The Customs department filed a smuggling case. Investigations revealed that gold had been smuggled through the diplomatic channel 21 times between November 2019 and July 2020.

The National Investigation Agency started investigating the case on July 10 and it registered a case under sections 16, 17 and 18 of Unlawful Activities Prevention Act (UAPA) against four people — Sarith, Swapna Prabha Suresh, Sandeep Nair and Fasil Fareed. The NIA said the gold smuggling aided terror activities. It has, however, not been able to provide any evidence so far to prove its case.

The agency submitted a chargesheet on January 5 against 20 people. Sivasankar, whose alleged involvement in smuggling had created a huge political controversy, was not among those named as accused. The NIA had interrogated him for five days over a couple of months but could not find any incriminating evidence against him.

The Enforcement Directorate joined the investigation to look into violation of Prohibition of Money Laundering Act (PMLA) by Swapna Prabha Suresh, Sandeep Nair and Sarith. It submitted a complaint before the special court on October 6 after three months of investigation.

It also presented Sivasankar as the kingpin in the “money laundering activities” of Swapna and others. But the focus of the case that was gold smuggling has now shifted to the kickbacks received for contracts for the housing project known as ‘LIFE mission’. The contracts were allegedly facilitated by the accused on payment of “commission”. 

In an additional complaint submitted on December 24, the Enforcement Directorate said that Sivasankar had committed offences under the PMLA. However, nowhere in the document submitted to court (The Federal has accessed a copy) does the ED furnish any evidence except for  statements of the co-accused.

Besides being unable to submit substantial evidence, the agencies also seem to contradict each other in their findings.   

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The NIA seized ₹64 lakh and ₹36 lakh from two lockers owned by Swapna in two separate banks. According to the agency, this money is part of the proceeds from the smuggling activity engineered by Swapna and others. It says the money was intended for use in terrorist activities and, therefore, the case falls under UAPA.

The ED, however, argues that the money is the kickback received by Swapna and others for awarding the contracts for the LIFE Mission project in Wadakkanchery in Thrissur district to two private ventures (Unitac Builders and Sane Ventures) by the UAE Consulate and, therefore, should come under the purview of the PMLA. 

It also alleged that Sivasankar, too, had received kickbacks. But again the ED has not furnished any corroborating evidence to prove its charge apart from the statement allegedly made by Swapna and other co-accused.

According to the ED, Sivasankar called Customs officials over the phone to get the seized consignment released. However, it has not yet given any details of the calls. It has neither been able to provide the identity of the Customs officer who received the call nor the CDR details. 

The NIA is planning to make Sandeep Nair, one of the four main accused named by all the three agencies, an approver in its case. 

The ED says he played an active role in the conspiracy for smuggling gold through the diplomatic channel as well as transporting the contraband within the state. The ED’s case records, for example, say that gold was concealed in electronic goods and transported to Sandeep’s house. The process of extracting gold by breaking the electronic goods was done at his house (statement made by Sarith on August 10, 2020). Sandeep, according to the ED, also allegedly received kickback for facilitating contracts for Unitac Builders and Sane Ventures. 

There are, however, a few things on which the three agencies are in agreement. 

All the three say that gold was smuggled through the diplomatic channel at least 21 times between November 2019 and July 2005. The accused kept ill-gotten money as fixed deposits, term deposits, currency and gold (in lockers) that belonged to Swapna, Sarith and Sandeep. The NIA attached a  total of ₹1.85 crore of such alleged ill-gotten wealth. 

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As of now, only the NIA seems to have concluded the investigation. The Customs department is yet to submit the final chargesheet, while the ED has sought the permission of the court to submit any additional reports it may come up with as the investigation continues.  

The chargesheet filed by the NIA remains confidential. Not even the defence lawyers have received a copy of the chargesheet. According to advocate Reghunath, a defence lawyer, the NIA filed a petition in court for keeping the chargesheet confidential so as not to provide the copy to anyone, including the lawyers defending the accused.