Cooperative dept officials who flagged Karuvannur bank scam suspended

Thiruvananthapuram: Resentment is brewing among the Cooperative Department staff against the State Government' action of suspending honest officials, who were instrumental in unearthing corruption and misappropriation to the tune of Rs.100 crore in the Karuvannur Cooperative Bank in Irinjalakuda.

The suspended officials included a woman auditor, who gave special report to the department twice about irregularities, and the Joint Registrar, who officiated in the post for just three weeks.

Senior Auditor T.K.Sherly, who was with the Mukundapuram office of the department from 2016 to 2020, has been suspended by the government. Ironically, the higher-ups in the department, who did not act on the special report, has gone scot-free.

A nine-member high-level committee, appointed recently by the government, has found that the annual audit reports from 2014 clearly pinpointed serious financial irregularities going on in the bank.


Sherly's suspension shocked those department officials who go by the rule book. She gave special reports in 2018 and 2019 about the fraud being committed in the bank.

She gave special reports to the Assistant Director (Audit) sitting in the same office. The Assistant Director handed it over to the Thrissur Joint Director (Audit). Since, the Joint Director did not order any fresh inquiry or raise any queries, these special reports were considered proper.

As per the law, the Joint Registrar was supposed to hand over the report to the police for further criminal proceedings. But this has not happened in the case ostensibly under pressure from the political bosses.

It was only three weeks ago that the government had appointed a high-level committee to look into the scam and submit a report. Strangely, the committee found that the special reports filed by Sherly in 2018 and 2019 were not in order.

She has been suspended from service on the basis of the high-level committee report. The Joint Registrar (Audit), who held the post for three weeks from December 31, 2020 to January 21, 20, was also suspended from service pending inquiry.

But no action was taken against the higher officials, who scuttled a police inquiry into the findings of the special audit report filed by Sherly.


The CPM-led governing body, which had been running the bank for a decade came to know about the fraud in 2018 itself after the special audit prepared by Sherly got leaked to the party circles. A section of the party leaders in the district likely supported the fraudsters by scuttling the police probe based on the findings of the special audit report.

An audio clip in which a meeting of the party's Madayikonam branch committee in Irinjalakuda is heard discussing the bank fraud is now in circulation. The discussion took place because the then president of the bank was a member of the CPM's Madayikonam branch committee.

Even after deliberations, the CPM did not take any action against the erring party members. The party's district leadership also kept mum on the issue then. It is alleged that though the Cooperation Minister in the previous Pinarayi Vijayan Cabinet was informed of the gravity of the bank fraud, no action was taken to bring the culprits to the book.

But the CPM was prompt in suspending the party member, who had raised the issue of corruption in the bank five years ago before the party area committee and the local committee.  

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