Wayanad’s CPM-run Brahmagiri society in red, may land 30 others in dark days
Targeting a huge turnover, the BDS had pooled massive investments for the expansion of the Malabar Meat, the meat processing unit and recruited additional manpower to enhance professionalism.
Targeting a huge turnover, the BDS had pooled massive investments for the expansion of the Malabar Meat, the meat processing unit and recruited additional manpower to enhance professionalism.
Targeting a huge turnover, the BDS had pooled massive investments for the expansion of the Malabar Meat, the meat processing unit and recruited additional manpower to enhance professionalism.
Kalpetta: The CPM-controlled Brahmagiri Development Society (BDS) in Sulthan Bathery, Wayanad, reeling from financial crisis following alleged irregularities, has spelt trouble for over 30 cooperative financial institutions in Malabar.
According to the figures of the Cooperative Department, the total amount BDS owed to the 16 banks of Kozhikode district up to March 31, 2023, stood at ₹15.177 crore. Some of the banks extended financial aid to BDS after 2019, when the COVID-19 pandemic struck.
Seven institutions in Kozhikode have lent loans above Rs 1 crore. Beypore Service Cooperative Society (₹1.07 crore), Calicut Town Service Cooperative Bank (₹2.14 crore), Chevayur Service Cooperative Bank (₹2.14 crore), Olavanna Service Cooperative Bank (₹2.64 crore), Panangad Service Cooperative Bank ( ₹1.03 crore), Peruvayal Service Cooperative Bank (₹1.32 crore), and Ramanattukara Service Cooperative Bank (₹2.14 crore).
Targeting a huge turnover, the BDS had pooled massive investments for the expansion of the Malabar Meat, the meat processing unit and recruited additional manpower to enhance professionalism.
Lured by attractive interest rates, five employees' cooperative societies also made deposits in the BDS: Postal and Telecom Employees Cooperative Society (₹1.58 lakh), Postal and Telecom Employees Cooperative Society New B (₹50.39 lakh), SMGB Employees Cooperative Society (₹5 lakh), SMGB Employees' Cooperative Society New B (₹75 lakh) and Kerala Gramin Bank Employee Cooperative Credit Society (₹25.78 lakh).
With dues mounting, a few banks have sought legal remedies. Several banks are facing audit objections during internal auditing, while others are under fire from members, as most have not received either the principal amount or interest for the last few years.
A board member of one of the cooperative banks, who preferred anonymity, told Onmanorama that though the bank had approached CPM leadership, the party refused to take responsibility.
"Due to political pressure, we used to renew the loan every year by adding the interest to the principal,” he said. "In fact, it was owing to pressure from the party leadership that we decided to extend financial assistance to BDS, which was already sinking in the post-COVID financial slowdown,” he added.
Calicut Town Service Cooperative Bank General Manager Sunil Kumar E told Onmanorama that the bank had filed a case against BDS to recover the amount (₹2.14 crore and interest for one year), as repeated efforts to get repayment had failed. “Up to March 2024, the interest was adjusted by adding the amount to the principal, but this year, there was no other go, but to approach the court,” he said. Another official of the Beypore Service Cooperative Society said the institution is under tremendous pressure from the board members to take legal action, but the CPM leadership is against it, arguing that "any such move will bring shame to the party".
It was further pointed out that depositing money in BDS was in violation of section 57 of the Kerala Cooperative Societies Act, 1969, which prohibits one cooperative bank or society from depositing funds in another cooperative financial entity. Almost all the banks have received show-cause notices from the Department of Cooperation for the violation.
Amid the financial turmoil, the BDS management pins hopes on a tie-up with a leading financial institution.
According to Dr B Sunillkumar, Chief Operating Officer (COO) of BDS, a Memorandum of Understanding (MoU) will soon be signed with Cedar Integrated Food Tech Private Limited (CIFTL), a social entrepreneurship venture under the ESAF group of companies. “The venture would be on a profit-sharing basis, and a joint management committee would be constituted to address managerial issues,” he said.
“The profit will be shared every three months, and the debts will be cleared in a phased manner,” he added.
Though the Brahmagiri management expresses confidence in the upcoming tie-up, sources said that the task is not that simple.
Apart from the debts owed to cooperative entities, BDS also has more than ₹100 crore debt to over 500 individuals, including investors who had deposited Rs 1 lakh to ₹1 crore.
More than a dozen cases filed by Kerala Chicken farmers are pending in several courts in Kasaragod district. Moreover, the assets of BDS, including the Malabar Meat plant, are under Revenue Recovery proceedings initiated by financial institutions and individual creditors.