the big story

A golden scandal in Kerala

The TLDR: Earlier this month, 30 kgs of gold was seized at a Kerala airport. It has triggered a political firestorm that involves a mysteriously well-connected woman, the Chief Minister’s office and the UAE consulate. In other words, it has all the makings of a perfect masala movie. 

What happened here?

• On July 5, customs officials seized a diplomatic bag that arrived in Thiruvananthapuram airport on a chartered flight. 
• A man named Sarith Kumar showed up to claim the bag in the company of an official from the UAE consulate. 
• When the bag was finally opened—with the permission of the consulate—it contained 30 kgs of gold hidden in bathroom fittings. The value: Rs 15 crore.
• The consulate denied all knowledge of the illegal shipment. 
• And it turned out that Kumar was no longer an employee of the consulate, and had no authority to collect the diplomatic bag. 
• Kumar was arrested, and he proceeded to squeal.

Who did he name?

Sarith Kumar was a Public Relations Officer at the local UAE consulate until last year. When arrested, he named three others. Fazil Fareed is a known gangster, while Sandeep Nair is Sarith’s brother. But the person who’s raised the most eyebrows is Swapna Suresh—a mysterious conwoman with connections in the highest places, and a very colourful history. 

Who is this woman?

Here’s what we know about 36-year old Swapna Suresh:

• Suresh studied in Abu Dhabi for a period of time, and then returned to Kerala. She has no college degree, and has not even cleared the state school board exam.
• And yet, after a number of low-paying gigs, she landed a cushy job in 2013 at Air India SATS (which handles ground operations for the airline). Here she became embroiled in a sexual harassment case—and was accused of forging 17 bogus complaints against a senior executive.
• She then moved on to a job at the UAE consulate in 2016 as Executive Secretary. This is where she cultivated a network of high-flying Kerala bureaucrats and police officials: “Swapna befriended top guns by handing them invitations to the programmes hosted by the consulate. She followed up by sending them gifts on special days.” In return, she scored invites to high-level sarkaari events.
• Suresh was fired/let go in 2019 when the Air India criminal case was uncovered.
• But she quickly moved on to a government-run Information Technology project as its operations manager. No one knows how she landed this job either, and all the placement agencies involved are pointing their fingers at one another.
• This is where the political connection kicks in. Suresh allegedly had a close relationship with M Sivasankar—who was IT secretary and primary secretary to CM Pinarayi Vijayan. 
• The allegation is that Sivasankar got her the IT job, and that his flat was used to plan the smuggling operation.

So what’s happened now?

Suresh is being painted as the femme fatale of gold smuggling in Kerala. For example, this is Malayala Manorama’s description of her personal life:

"Several persons who claimed to have been close to Swapna said she broke ties with people as easily as she made them. She was motivated by the growth in her career and her pursuit of luxury. She had short-lived relations after separating from her husband."

Suresh denied all allegations in an audio message, released when she went into hiding. She has since been arrested—along with Sandeep Nair and several others.

 Also this: Sivasankar has been fired. While Congress and BJP are attacking the CM, at least two of the suspects have BJP connections.

Why does any of this matter?

Quite apart from the tabloid-worthy details, gold smuggling is a serious problem in India. And here’s how it works:

• Gold is transported from mines in Africa to Dubai—which is a major distribution hub for gold. 
• Here it is melted into biscuits and sold. All of this is legal—until it makes its way to India. 
• The government imposes a 12.5% duty on gold. To evade this tax, smugglers typically get mules to bring it into India—a great part of it via Kerala, where 400 kg was seized in 2019-20. Even Vande Bharat repatriation flights are not immune.
• The gold is then melted and turned into jewellery—which is again sold under the table to evade the 17% in taxes, including GST and import duty.
• The profit on 1 kg of gold: Rs 500,000.
• The lost revenue in taxes in just Kerala: Rs 30 billion.
• Interesting point to note: People often buy smuggled gold at a premium as a way to launder their money.

Other worrying angle: Intelligence officials say that the profits are being used to fund terrorist activities. Also: government sources point out that diplomatic bags cannot be used without the collusion of at least some consulate officials.

Reading list

Malayala Manorama did a four part series on this case. Part 1: Who is Swapna Suresh? Part 2: The plot between Suresh and Sarith. Part 3: patterns in gold smuggling. The Lede filed an RTI and did an excellent report on how gold smuggling works in India. Indian Express explains why the big sharks always escape. The News Minute reports on the use of a diplomatic bag.