House co-op in the dock over large-scale irregularities

House co-op in the dock over large-scale irregularities

Govt disqualifies Board of directors, appoints administrator

In a significant move, the Karnataka government has disqualified the Board of Directors of National Technological Institute House Building Co-operative Societies - NTIHBCS - following complaints of irregularities.

The government has appointed a special officer as administrator. Realty firms benefit
There were several complaints about misappropriation of funds to the tune of more than Rs 600 crore in the sale of land, allotment of sites at NTIHBCS.

The Society has sold prime lands, at its disposal for allotment of sites to its members, to real estate companies. In 1988, the Society had got 19 acres 32 guntas from Bangalore Development Authority (BDA) in Nagashettihalli village near RMV 2nd stage. All these lands were sold to various builders.

One of  the complaints to the Registrar of Co-operative Societies said that the lands to an extent of 11 acres 20 guntas were sold to L K Trust for a meagre Rs 5.64 crore, whereas the guidance value itself was Rs 25.13 crore. The same land was subsequently sold by L K Trust for Rs 140 crore within one year.

The government later acquired lands in Kodigehalli, Kothihosahalli and Byatarayanapura villages and allotted an extent of 178 acres 38 guntas to the Society to form residential layout and allot sites to members. The Society again sold the lands to an extent of 10 acres for a value of Rs 10.5 crore to SBG Housing Private Limited.

This sale was done by way of calling for tenders in October 2004 and SBG Housing was shortlisted around two months before the sale permission was accorded by the department.

The complaint had stated that almost all the companies that participated in the tender were in one way or the other linked to the then minister for co-operation and present energy minister D K Shivakumar. The SBG Housing was represented by one N Chandrashekar, with whom Shivakumar has financial transaction. This is evident from the affidavit filed before the Election Commission.

Role of officials

“In the lands sold to SBG Housing, many members were allotted sites and those members were either forced to choose alternative sites or seek refund of site deposits,” a member said.

He continued, “While the Board of Directors has committed irregularities, it is also pertinent that the officials in the department of co-operation had their role by way of according permission for the sale of land. The department has allowed the sale against the law without even obtaining the NoC from the BDA, which had allotted the lands to the Society.”

Joint Registrar of Co-operative Societies Pandurangappa said that the entire Board of Directors of the Society had been disqualified under Section 29 C of the Karnataka Co-operative Societies Act.