Kozhikode: The Crime Branch will approach the Judicial First Class Magistrate Court, Kozhikode, on Saturday seeking permission to re-arrest R Premkumar, founder-chairman of the Bharath Lajna Multi-State Cooperative Society (BLM), who was released shortly after being arrested in connection with an alleged financial fraud of ₹15 crore.

Premkumar was brought to Kozhikode from Chennai by a Crime Branch team led by Deputy Superintendent of Police VV Benny with the arrest recorded on Friday. However, the Judicial First Class Magistrate Court-IV ordered his release after the defence argued that the investigating agency had not followed the mandatory procedures for arrest.

Investigation officer VV Benny told Onmanorama that the court's observation was only technical in nature and that the release did not affect the investigation. The Crime Branch would submit an application before the court on Saturday seeking permission to arrest him again, he said.

Premkumar was taken into custody from his residence in Nungambakkam, Chennai, and brought to the State Crime Branch office in Kozhikode on Friday and produced before the magistrate around 4.30 pm.

Defence lawyers appeared and argued that the Crime Branch had failed to comply with the legal procedures required before making the arrest. The investigating team submitted that a notice had been issued to Premkumar before the arrest, but he had refused to accept it. However, the court ordered his release.

The case was registered by the Nadakkavu police based on a complaint filed by the society's former CEO, alleging financial irregularities amounting to around ₹15 crore.

According to the Crime Branch, Premkumar diverted depositors' money to institutions held in his name and those of his relatives. The investigating team has examined 320 accounts dating back to 2019.

Meanwhile, the society's Chief Operating Officer VP Saidalavi and General Manager VG Karthik denied allegations of deposit fraud. They said the Bharath Lajna Multi-State Housing Cooperative Society had assets worth more than its liabilities towards depositors.

"There is no reason for depositors to panic. There has been no instance of matured deposits not being repaid, and no other depositor has so far lodged a complaint alleging non-repayment of money," Saidalavi said.