Bengaluru, April 9 The Enforcement Directorate (ED), Bengaluru Zonal Office, has arrested former Chairman of Shivamoga DCC Bank, R. M. Manjunatha Gowda, under the provisions of the Prevention of Money Laundering Act (PMLA) on Wednesday in connection with the fake gold loan case.
The official statement by the ED said that Gowda has been found involved in the offense of money laundering, adding that the case involves the disbursal of over Rs 62 crore in loans by accepting fake gold jewellery as collateral at the Shivamogga District Co-operative Central (DCC) Bank.
ED said that after the arrest, he was produced before the Special Court, and the court remanded him to the ED custody for 14 days.
“Investigation revealed that large-scale misappropriation of funds took place at the Shivamogga District Co-operative Central Bank, City branch, which was orchestrated primarily by the branch manager, B. Shobha, on the instructions of Manjunatha Gowda,” the statement by the ED stated.
The investigating agency said that as per the chargesheet filed by Lokayuktha Police, Sobha, in conspiracy with other co-accused, diverted a significant amount of bank funds, totalling approximately Rs 62.77 crore.
ED said that the modus operandi involved opening fraudulent gold loan accounts without the knowledge of the individual account holders, utilising fake, fabricated, and forged documents.
The central investigating agency revealed that Proceeds of Crime (POC) generated by B. Sobha in conspiracy with other co-accused from the commission of a scheduled offense were laundered and also handed over to Manjunatha Gowda.
The investigating agency said that he had acquired various movable and immovable properties and was found to be in possession of various such properties acquired from POC generated from this offense.
“As per the chargesheet filed by the Lokayuktha Police, he was also found to be in possession of assets disproportionate to his known sources of income. Therefore, Manjunatha Gowda was arrested under Section 19 of the PMLA,” the ED said.
It said that further investigation is in progress.
On April 8, search operations on various locations across Shivamogga and Bengaluru, including the office of the Shivamogga DCC Bank, City Branch, were carried out with the gold loan scam and diversion of funds.
Various evidence, including digital evidence, has been seized during the searches.
The scam was unearthed in July 2014, after the bank's general manager lodged a complaint with the police.
The Doddapet Police in Shivamogga arrested the prime accused, Manjunath Gowda, in connection with the scam then.
The investigations had revealed that the accused disbursed loans against fake gold, and in some cases, with no gold mortgaged against the loan.
Gowda and six other administrative board members were disqualified in 2006 from their posts on charges of financial irregularities.
Further, it was revealed that between 2004 and 2014, gold loans totalling Rs 62 crore were disbursed. In this period, Rs 5.5 crore loans were given against actual gold in 144 cases, Rs 40.57 crore loans against fake gold in 185 cases, and Rs 17.13 crore loans against no mortgage.
The sources revealed that Manjunath Gowda is a close confidant of Deputy Chief Minister D. K. Shivakumar.
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