ED raids on houses of accused in Karuvannur Bank fraud

Thrissur: The sleuths of the Enforcement Directorate (ED) are carrying out checks at the houses of the accused in the multi-crore scam at Karuvannur Cooperative Bank at Irinjalakuda in Thrissur district.

An ED team from Kochi commenced simultaneous raids around 8.30 am on Wednesday at the houses of Bijoy, K K Divakaran and Biju Kareem, all accused in the misappropriation case.

Last year, the bank’s CPM-led governing council was sacked and it was placed under the watch of an administrator as the fraud came to light. Before that, several borrowers received recovery notices for amounts greater than they had borrowed. The borrowers approached the Registrar of Cooperatives and a probe unearthed a multi-crore scam.

The irregularities at the bank are pegged at Rs 300 crore, but the government estimates it to be only Rs 150 crore.

A week ago, the High Court of Kerala ordered the Karuvannur Cooperative Society Bank to stop all payments to depositors until the government comes up with a roadmap, prioritising the repayment of deposits.

While issuing the order, Justice T R Ravi exempted payments for emergency purposes from the temporary ban but said it should be reported to the High Court.

Observing that the deposits were being returned without any criteria, the court directed the government to seek ways to avail loans to tide over the crisis. It also sought the audit report of the bank and observed that a scheme should be drawn up to return the deposits.