In its report filed in a special court here today, Vigilance and Anti-corruption Bureau (VACB) said its investigation did not come across any proof that suggested Chandy had a role in the controversial deal.
The report filed by Vigilance SP V N Sasidharan said Chandy was not aware of the details of the decision to import palmolein through a Singapore based firm.
Last year, a vigilance court in Thiruvananthapuram had ordered a probe to ascertain if Chandy had any role in the 1992 palmolein oil import deal.
Though Chandy was not an accused in the case originally, his name figured following a discharge petition filed by former food minister T H Mustaffa.
Mustaffa, an accused in the case, had pleaded that justice given to Chandy by not making him an accused in the case should be given to him (Mustaffa) also.
Seizing on the development, the previous CPI(M) led-LDF government filed a petition seeking further investigation in the case, stating more persons were likely to become accused.
The long-pending corruption case,in which Karunakaran was first accused, had cost P J Thomas the post of Chief Vigilance Commissioner. Thomas was listed as the sixth accused in the case relating to import of 32,000 tonnes of palmolein from Malyasia, causing a loss of Rs 2.32 crore to the excehquer.
A vigilance judge hearing the case had some months back rescued himself from the case after he was accused of political bias by Government chief whip P C George.