Karuvannur-like irregularities in 12 co-op banks in state, ED tells HC

Kochi: The Enforcement Directorate (ED) has informed the Kerala High Court that it had unearthed  irregularities in 12 more service cooperative banks in the state, similar to the one occurred in Karuvannur Bank. 

The irregularities are found in Ayyanthole, Thumboor, Nadackal, Mavelikkara, Moonnilavu, Kandala, Perumkavilla, Mylapra, Chathannur, Konni Regional, Marayamuttom, and BSNL Engineers cooperative banks. 

ED's response came in a counter affidavit filed in response to a plea moved by Ali Sabri, an accused in the Karuvannur case, against ED attaching his properties and freezing the bank accounts. 

In its affidavit, ED stated that the involvement of political leaders became evident during the questioning of those linked with the case. 

According to the affidavit filed by Assistant Director S G Kavitkar through Adv Jayashankar V Nair, ED  had said that it is in the process of sending summons to those named in the affidavit submitted earlier. 

Additionally, ED alleges that Karuvannur Bank breached the Kerala Cooperative Societies Act by engaging in irregularities related to membership issuance and neglecting to maintain a membership register. Account books of various institutions under the bank were also not maintained, they said. 

ED says it had also unearthed unlawful practices like issuing gold loans for fake gold and illegally accepting gold bars as collateral. Furthermore, it says that the bank flouted rules to issue gold loans to its employees and accepted lands outside the bank's limits as collateral to sanction loans.

The central agency criticized the registrar for not taking decisive action against the bank despite having knowledge of the malpractices. Political elites and cronies were behind many decisions. The same will be the case with other cooperatives, ED said. 

Meanwhile, ED claims that the petitioner, Ali Sabri, illegally took a loan from Karuvannur Bank in his name and the name of his family members with the knowledge of the board members and employees.