On Monday, January 15, the Enforcement Directorate investigating the money laundering case linked to the Rs 312 crore fraud at the ruling CPM-controlled Karuvannur Co-operative Bank, filed an affidavit in the Kerala High Court. In the affidavit, ED said that the irregularities were committed at the behest of the party leaders of the Pinarayi Vijayan government in the state.
The agency further asserted that the bank fraud was “an organised crime”.
“It was found that many of the accused are office-bearers and members of the ruling political party CPI(M) and there was a deep-rooted conspiracy to embezzle money from the public and make gains for the party as well as its leaders,” the agency said in an affidavit filed in court.
Furthermore, the ED asserted that the bank fraud was “an organised crime,” and the results of its investigation to date have identified high-profile links including politicians, police officials, and individuals in local, district, and state-level administration.
“It is one of the biggest scams the state of Kerala has ever seen in terms of money, political links, and public fraud. The transactions undertaken by these individuals are in ‘benami’ names and cash-based operations, which are easy to dispose and conceal from the investigation.” the ED added.
Party committees were operating accounts in the society without membership, the ED further stated, alluding to the CPI(M)’s purported involvement in the scam.
“Further, it is also revealed during the investigation that such accounts are maintained by CPI(M) party committee for different purposes including for collecting funds for the purchase of land, construction of party office, for raising funds for election expenses and souvenirs etc.
“The money flow out of these transactions is being investigated and it is revealed from the investigation so far that senior political leaders of the party are involved in these transactions and unprecedented money laundering has been carried out by them,” the agency said.
The affidavit was filed in response to an appeal by one of the accused in the case challenging the ED’s provisional attachment order and seeking de-freezing of his bank accounts.
In its affidavit, the ED requested that the plea be dismissed, arguing that because the amount at stake was substantial and ordinary citizens had lost their deposits, the agency had a duty to look into the cash-based money trail and benami properties to identify the real offenders.
It further accused the state’s Registrar of Cooperative Societies of “turning a blind eye” to the irregularities committed by different societies in Kerala.
“During the investigation, from the copy of the audit reports of the bank for the past 10 years, it was revealed that the audit objections reported the irregularities to the joint registrar. However, the office of the registrar, after knowing the above fraud and embezzlement, appears to have not taken these into observation and no actions were initiated.
“This practice of inaction on the audit observations and complaint appears to be in most of the cooperative societies regarding which the registrar had earlier been summoned. The timely action by the office of the registrar could have avoided such a big scam. In the investigation conducted by the ED, it is revealed that the Registrar of Cooperative Societies turned a blind eye to the irregularities by the societies,” the affidavit stated.
Karuvannur bank scam
The scam was unearthed in Kerala in 2021. On July 14, 2021, the Irinjalakuda police registered a complaint against the accused persons. Soon after, the case was handed over to the state crime branch. There were allegations that board members of the bank were aware of the ongoing fraud, and rampant forgery of signatures and documents carried out.
The governing committee of the bank with 12 CPM members was disbanded after the details of the scam were released in the public domain.
The Bhartiya Janata Party’s state unit complained to the Enforcement Directorate and the Income Tax Department alleging the involvement of top CPM leaders in the scam.
In 2019 too there were complaints filed against the same bank alleging fraud.
ED raids residence of Kerala CPM MLA in connection with the party-controlled Karuvannur Cooperative Bank scam case
In August last year, the Enforcement Directorate raided the residence of CPM MLA AC Moideen at Wadakkancherry in Thrissur district as part of an investigation in a money laundering case linked to the Karubannur Co-operative Bank scam case.
Moideen, who was reportedly under ED scanner over benami assets, was a State Minister in the first Pinarayi Vijayan government-2016-21.
According to reports, after the scam was unearthed it was revealed that Moideen, who is a senior CPI(M) leader who represents the Kunnamkulam constituency in the state Assembly, shares a close relationship with those who ran the bank.
