Karuvannur bank scam: Joint registrar and 15 others suspended; two arrests

CPM's Thrissur district leadership kept Karuvannur bank fraud under wraps

Thiruvananthapuram: In a fresh development in the Rs-100-crore loan scam in the CPM-controlled Karuvannur Service Cooperative Bank, 16 government officials were suspended on Wednesday. 

State Cooperative Minister V N Vasavan said the decision to take stringent action against 16 officials, including a joint registrar and three assistant registrars who failed to conduct proper auditing of the scam-hit bank, was on the basis of an interim report submitted by a high-level inquiry committee constituted by the government.

The report states that the officials had failed to find and report the fraud that had been going on since 2010.

The fraud continued during the period of governments of both Congress-led UDF and CPI(M)-led LDF.

The minister also said if the role of any officials, who are retired now, is detected in the inquiry, they will also be investigated.

The decision to suspend the officials, mostly belonging to the state cooperative department, was taken at a meeting of top officials chaired by the minister here today.

In the suspension order, the government said the inquiry committee has reported that the audit of the bank is under the control of the Thrissur District Joint Director (Audit) but no effective audit examinations of the bank's accounts had been carried out by the officials concerned since 2014.

In the preliminary inquiry, it was found that the auditors and officials concerned failed to report the serious financial irregularities happening in the bank.

Meanwhile, the Crime Branch wing of the Kerala Police probing the multi-crore scam arrested former bank manager Biju Karim and accountant CK Gils in connection with the case.

Another prime accused and former secretary of the bank TR Sunil Kumar was taken into custody after he surrendered to the Crime Branch on Monday.

A total of three accused have been arrested in connection with the case so far. Three are absconding.

A multi-crore loan scam was reported in the CPI(M)-controlled Karavannur Co-Operative bank following which police registered a case against six bank officials and launched an investigation.

After several people including local customers raised apprehensions about the bank's functioning, an audit had been conducted there recently, in which the charges were reportedly found to be true.

During the inspection, it was also found that loans were sanctioned on the property pledged by local customers without their knowledge and the loan amount was credited multiple times to the selected accounts. The case was registered against the bank officials, including the secretary of the bank, who were already placed under suspension over the allegations.

Meanwhile, a plea has been moved in the Kerala High Court by a former accountant of the bank seeking handing over of the investigation in the case to CBI or the Enforcement Directorate on the ground that the state police cannot unearth the entire conspiracy as the bank is run by a committee which owes allegiance to the ruling party.

Prior to that, Kerala Minister for Cooperation and Registration V N Vasavan had said there was no need for a probe by CBI or any other central agency into the scam as competent officers of his department and the police were investigating the matter.

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