Cooperative bank fraud: ED attaches properties valued at Rs 3.62 crore in Karnataka

Bengaluru, Sep 11 The Bengaluru Zonal Office of the Enforcement Directorate (ED) has provisionally attached two immovable properties worth about Rs 3.62 crore belonging to N. Srinivasa Murthy, the then Chairman of Shushruti Souharda Sahakara Bank Niyamitha and Rathnamma, a close relative of Srinivasa Murthy, under the provisions of Prevention of Money Laundering Act (PMLA), 2002, in a case related to cheating with account holders of the bank, the official statement said on Thursday.

The ED initiated investigation on the basis of various FIRs registered by Karnataka Police wherein it was alleged that the bank neither paid interest nor returned principle amounts to its customers on their fixed deposits or savings accounts held with the bank, the statement said.

It was also alleged that the Chairman and Directors of Shushruti Souharda Sahakara Bank Niyamitha in collusion with the employees of the bank has siphoned off the deposits made by the customers of the bank and thereby cheated the customers of the bank, through its management and employees, the ED added.

During the investigation under PMLA, 2002, it was found that Srinivasa Murthy, his wife Dharini Devi and their daughter Mokshatara, the Chairman, Director and Functional Director, respectively, of Shushruti Souharda Sahakara Bank Niyamitha were instrumental in the diversion of funds from the said bank, the statement added.

"Investigation also revealed that Srinivasa Murthy floated different financial entities viz. Shruti Souharda Credit Co-operative Society, Shree Lakshmi Mahila Co-Op Society managed by Rathnamma, a close relative of Srinivasa Murthy etc., and accepted deposits from various depositors only to cheat them. It was also revealed that Srinivasa Murthy and others used to sanction loans in the names of their close associates, without following proper procedure and at times without any collateral. Srinivasa Murthy and others used to get properties registered in their names from the said loan amount and the loan accounts were later turned into NPA," according to the ED.

Further investigation is underway.

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