Kerala Assembly was twice informed about shady dealings at Karuvannur Cooperative Bank

Thiruvananthapuram: The Kerala government sat on crucial findings regarding financial misappropriation at the Karuvannur Cooperative Bank in Thrissur, which is facing allegations of Rs 300-crore irregularities. No action was subsequently taken against the bank's administrative board comprising CPM members even as more people were duped on the pretext of loan advances.

Documents reveal that the bank has been under the scanner of the Cooperation department for a couple of years. The matter was even mentioned in the Kerala Legislative Assembly in 2019 and 2020 with the Bank appearing first on the list of 17 cooperative bodies from Thrissur district with shady dealings.

The then Cooperation Minister had informed the Kerala Assembly in November 2019 that cases were filed against 121 cooperative bodies in the state over financial irregularities. The Karuvannur Bank featured in the list that was submitted as annexure to the Minister’s reply.

The Assembly was informed then that all these cooperatives had incurred a combined loss of Rs 243.05 crore due to financial irregularities. At the Karuvannur Cooperative Bank loans worth crores of rupees were advanced to scamsters, but the loans were taken in the name of CPM followers who are bank members, but without their knowledge.

In response the government had explained in the Assembly that it was taking prompt measures, including revenue recovery.

In another list submitted in the Assembly by the Minister in March 2020, the Karuvannur Bank was among the 168 cooperative societies against which action was taken by the Cooperation department for corruption. Even then, Thrissur district had the most number, 51, of cooperative bodies under scanner.

This means the irregularities continued in the bank even though the Assembly was informed about them. Although an assistant manager was suspended on the basis of the assistant registrar's probe report, the administrative board and other officials were allowed to continue in their positions and a new team was entrusted with the probe.

Even when over 30 cooperative societies, which were found to be involved in irregularities for far lesser amounts, were dissolved during the tenure of the previous Left Democratic Front government, the Karuvannur Bank was shielded.

As reported earlier the director board of the bank was dissolved on Thursday in the wake of the scam. The director board headed by CPM Porthassery branch secretary K K Divakaran as president had been running the cooperative bank for the past 10 years. The board had 12 directors: P K Lalithan, T S Baiju, K V Sugathan, M A Jijo Raj, M A Aslam , M B Dinesh, Jose Chakrampully, N Narayanan, Ambili Mahesh, Mini Nandan and Sumathi Gopalakrishnan.

The district-level leadership of the CPM in Thrissur likely kept the loan fraud under wraps for over two years though early probe suggests the loans were being illegally advanced for about six years. It has been found that one of the main accused in the case, former bank manager M K Biju, took the initiative to pass 379 loans.

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