Credit co-op society accused of cheating dozens of depositors

Scores of depositors allegedly cheated by Sri Vashista Credit Souharda Sahakari Ltd have demanded multiple FIRs over the “financial fraud”.

While about 70 depositors were cheated, police have registered only one FIR based on the complaint of a single depositor, invoking IPC sections pertaining to cheating, criminal breach of trust, forgery and misappropriation.

The credit cooperative society headquartered in South Bengaluru is accused of cheating the depositors to the tune of crores of rupees by failing to pay them interest or return their principal amount.

The individual whose complaint resulted in the FIR is one Arun B N, a resident of Arekere, Mico Layout. He kept Rs 99 lakh as fixed deposits at the co-op between 2015 and 2020 on behalf of his father Nagaraja B T, 78. The co-op stopped paying interest last November. There was no word on returning the principal either, Arun said in the police complaint. He named the co-op’s chairperson, Venkata Narayana K N, his director-son Krishna Prasad and others.

According to Arun, the co-op office-bearers had sought more time to solve the issues but later stopped responding to their requests. Things came to a head recently when the depositors were denied cash withdrawal.

A group of around 15-20 people approached Harish Pandey, Deputy Commissioner of Police (South), and got the FIR registered at the Hanumanthanagar police station.

Depositors say the co-op office-bearers cited the pandemic for the crisis. Many borrowers had failed to repay, leading to an increase in the bad loans. This affected the co-op’s overall balance sheet and severely affected the profits, depositors say, quoting the co-op office-bearers.

Sri Vashista Credit Souharda Sahakari Ltd was founded 25 years ago and comes under the Registrar of Cooperative Societies. Customers didn’t have to open a savings bank account to keep fixed deposits (FDs) at the co-op, according to Vijay Savanur, one of the depositors. They were offered higher interest than what banks give. Many people, especially senior citizens, opened the FDs.

The co-op was able to offer high interest because it charged borrowers a commission on loans. Customers also received a commission for introducing and signing up other depositors. But the pandemic disrupted this financial model. As the credit growth declined, the co-op’s cash suffered and it struggled to pay the promised interest, Savanur explained.

On Tuesday, Hanumanthanagar police took Arun’s statement besides recording the video statement of 35 other depositors, who will be listed as witnesses, a senior police officer said.

Police questioned Narayana and Prasad, and asked them to submit details of the investments, said an officer who’s part of the investigation.

Savanur said the police were going slow in the matter as they were yet to question others involved in the scam. He also questioned the registration of a single FIR when at least three of the 30 depositors had filed complaints.

“There are around 70 depositors who have been cheated. All of us have decided to go to the DCP again to get all our complaints heard and separate FIRs registered. We want a separate FIR for each depositor. Senior citizens may not recall what they tell the police now during the trial,” Savanur said.

The depositors are planning to petition the Registrar of Cooperative Societies and filed a PIL petition in the high court.

Prasad, one the directors in the co-op society, didn’t respond to phone calls or text messages from this newspaper.