16 officials were suspended by the Kerala government on Wednesday for their failure in detecting a bank loan fraud worth over Rs 100 crore in the Karuvannur Cooperative Bank in Thrissur, reported The News Minute.
The Crime Branch team assigned to the case had arrested the key accused, TR Sunil Kumar, on Monday, August 9. Based on an interim report by an inquiry committee set up by the government, additional action was taken against 16 officials for failure to detect fraudulent activities in time.
VN Vasavan, State Cooperative Minister, noted that strict action will be taken against the 16 officials for not conducting proper auditing. The accused includes officials from the state cooperative department, a joint registrar and three assistant registrars of the CPI(M)-owned bank.
After receiving the interim report, the decision to take action against the accused officials was made during a meeting with top officials, chaired by VN Vasavan. Vasavan told PTI that the fraud has been ongoing since 2010, and has withstood both Congress-led United Democratic Front (UDF) government as well CPI(M)-led Left Democratic Front (LDF) government.
The fraud first came into light when 63-year-old TM Mukundan, a former member of the Porathissery panchayat, committed suicide following a foreclosure notice for amounts he didn't borrow. Subsequently, a probe was ordered in 2019 by the Thrissur Joint Registrar of Cooperation.
It was found that the scam, accumulating upto 100 crores, was done by faking signatures to sanction transactions and borrowing money without the knowledge of the customers. Benami transactions (transferring property from one person to another as payment) and remortgaged properties were also used in this scam.
The probe was completed in October 2020, but no action was taken.
Vasavan also added that retired officials will still be investigated if their names are identified during the inquiry. Furthermore, the government noted that while the bank's audit falls under the control of the Thrissur District Joint Director, the inquiry committe's report reflected that no effective audit examinations were carried out since 2014. Officials failed to report on the financial irregularities taking place in the bank in due time.
The Crime Branch team handling the case arrested two more people tied with the scam on Wednesday. Out of the six accused, law enforcement has so far arrested the prime accused and two more, and is investigating to arrest the remaining three.