Reports of fraud in Kerala's co-op banks were isolated: CM Vijayan

Thiruvananthapuram: Kerala Chief Minister Pinarayi Vijayan said on Sunday that incidents of irregularities and frauds in various cooperative sector banks reported in the state were isolated and committed by those who are "greedy", PTI reported.

Vijayan also said that a bad mark on one establishment in the cooperative sector may erode people's confidence in the entire sector, and therefore, it is necessary to ensure that does not happen.

The chief minister said that while the government is clear that those who engage in corrupt practices do not go unpunished, it also needs to safeguard the cooperative sector enterprises and ensure public trust in them is not eroded.

"For that, requisite steps are being taken as and when necessary," he said while speaking at the 9th Cooperative Congress at Kanakakunnu here.

He said that while the isolated incidents of irregularities and corrupt practices were inevitable as the cooperative sector grew rapidly in the state, it also resulted in some becoming envious of the unprecedented growth.

Vijayan further said that while agencies from outside the state were welcome to probe such incidents of irregularities, it should be done properly.

In an apparent reference to the Enforcement Directorate (ED) probe into the multi-crore fraud in the Karuvannur Service Cooperative Bank, the chief minister said that the investigative agency turned the prime accused into an "approver" in order to obtain material from him for political gains. Such acts should be avoided, he said.

These remarks by the chief minister come less than a week after the ED told the Kerala High Court that irregularities in the multi-crore scam that hit Karuvannur Cooperative Bank were committed at the behest of the party leaders of the ruling CPI(M) in the state.

The ED, which is investigating the fraud, had told the court that during its investigation, "it was found that many of the accused are office-bearers and members of the ruling political party CPI(M) and there was a deep-rooted conspiracy to embezzle money from the public and make gains for the party as well as its leaders." It also blamed the Registrar of Cooperative Societies in the state for "turning a blind eye" to the irregularities of various societies in Kerala.

This case of alleged fraud, beginning in 2010, at the Thrissur-based Karuvannur Cooperative Bank triggered a political row in Kerala two years ago.

The money laundering case stems from 16 FIRs registered by the Kerala Police (Crime Branch) in Thrissur.

After the Kerala police registered the FIR in July 2021, the registrar, in their audit, found "diversions" of more than Rs 100 crore, the ED had said in 2022.