Kozhikode: The State Department of Cooperation on Monday dissolved the Congress-led director board of the Karassery Service Cooperative Bank in Kozhikode after an audit report revealed irregularities in loan sanctioning and other financial transactions. The bank has now been placed under the department's administrative control. Following the dissolution, the bank authorities issued a notice to the staff.

Meanwhile, several employees lodged a complaint with the police, and nine directors approached the Kerala High Court, alleging illegal enrolment of members in the bank.

According to the complaints, around 800 new members were added overnight using the login IDs of seven employees without their knowledge. Four of these employees have lodged complaints at the Mukkom Police Station. The illegal membership entries were reportedly made from the Nellikkaparamba branch from Sunday night until the early hours of Monday.

However, the UDF staged a protest in front of the bank, alleging conspiracy to hand over the bank’s administration to the CPM.

Nine out of the 13 board members have approached the High Court, accusing Chairman NK Abdu Rahiman, a former KPCC member, and a few of his allies on the board of illegally inducting new members. They have also filed a complaint with the Registrar of Cooperative Societies. Hours before the dissolution order was issued, the nine directors passed a no-confidence motion against the chairman on Monday morning. It is learnt that these directors have not yet received a copy of the dismissal order.

Membership doubled overnight
The Karassery Bank — once one of the best-performing cooperative banks in the country, with nine branches — is now facing severe financial strain, with expenditure surpassing revenue. A UDF panel has been at the helm of the bank.

While the bank had 770 A-class members with voting rights as of November 29, an additional 829 A-class members were added overnight on Sunday.

“This is a clear move by the chairman to hand over the bank to the CPM. All the newly added members are guaranteed CPM votes. The dismissal of the board of directors is part of the same plan. The procedures for dissolution began weeks ago on the basis of alleged audit irregularities, which are not sufficient grounds to dissolve a board,” said MT Ashraf, an executive committee member of the District Congress Committee.

He alleged that the chairman acted on his own, seeking assistance from an IT company that manages the bank’s software systems. 

“By 1 am on Monday, 829 new members were added. With the board dismissed, the new administrative team can easily approve all of them as A-class members with voting rights,” he said.

Congress leader N Subrahmanian, who inaugurated the protest on Monday, alleged that the chairman was trying to escape the crisis with CPM’s support.

The International Cooperative Museum (ICM), the ₹150-crore project funded by the bank, is currently under construction in the heart of Kozhikode city.