VACB note on legality of foreign funding for Kerala’s Leader of Opposition, V.D. Satheesan

A Vigilance and Anti-Corruption Bureau (VACB) report, which raises questions about the legality of the Leader of the Opposition, V.D. Satheesan, marshalling foreign funds ostensibly for the rehabilitation of flood victims in his constituency in Paravoor, Ernakulam, in 2018, emerged in the public domain on Sunday (January 4, 2026), stirring political controversy. 

According to VACB officials, the agency’s investigation into allegations of fraud and the illegal diversion of funds for the Punarjani rehabilitation project dragged on for nearly 7 years. They said the prefatory probe report reviewed by the then director, Yogesh Gupta, in early 2025, indicated possible offences under the Foreign Contribution Regulation Act (FCRA), 2010. 

“The investigators who submitted the report noted that the Central Bureau of Investigation (CBI) was the competent agency to investigate violations of the FCRA, a Central Act. Hence,” the officials said, the Union Ministry of Home Affairs had jurisdiction over the matter, and not the State Government as widely assumed. 

Officials noted that the State Government’s consent was not a prerequisite for the CBI to investigate allegations against Mr. Satheesan regarding suspected FCRA violations, unlike other criminal offences, which fall under provincial governments’ purview. “Hence, a political decision from the government to refer the case to the CBI is not mandatory in the case, a Home department insider noted. 

The allegation against Mr. Satheesan centres on his 2019 visit to the U.K., at the behest of a charitable foundation, to raise funds for rebuilding flood-damaged houses and to distribute sewing machines to displaced families in Paravoor.

Last year, Mr. Satheesan defended the Punarjani scheme in the Assembly, claiming that the charitable foundation that financed the Punarjani project held FCRA registration. He also rejected accusations that funds were illegally diverted, claiming the transactions were conducted through legal banking channels, audited, and reflected in the financial records. 

The Congress Speaking to reporters in Wayanad, Mr. Satheesan said, “The government had attempted to drop a political bombshell by seeking to implicate him in a foreign funding scandal but had failed. He said back-to-back VACB enquiries had cleared him of any wrongdoing.”

“Now, the government is raising the FCRA angle to divert attention from the embarrassing conviction of Left Democratic Front (LDF) legislator, Antony Raju, for tampering with evidence in a narcotic case,” he added.

Mr. Satheesan said the timing of the media release of a “cherry-picked” version of the VACB report was telling. “In 2021, the LDF had referred baseless (sexual assault) charges against an array of top Congress leaders, including the UDF’s then star campaigner, Oommen Chandy, to the CBI to alter the arc of the political narrative. The government has taken a page out of the same go-to-election strategy playbook in 2026, he added.

CPI(M) Communist Party of India (Marxist) [CPI(M)] State Secretary M.V. Govindan said the LDF did not subscribe to the Congress’s view that the CBI was the final word or arbitrator. “Maybe, the government will have to say more on the issue, he said.