Kerala CPM in tight spot over a major cooperative bank scam

A major scam at a CPM-controlled cooperative bank in Kerala is turning out to be an embarrassment to the ruling CPM-led Left Democratic Front, especially since the Left-front has been resisting the Centre's moves like the formation of a new ministry for cooperation alleging of BJP's attempts to have a grip on the cooperative sector.

The Karuvannur Service Cooperative Bank in the Thrissur district is caught up in the scam in which the CPM local leaders, who are the administrators, are facing accusations.

The Opposition Congress launched an attack against the CPM over the issue by raising the matter in the state Assembly on Friday through an adjournment motion notice and alleging inaction by the Left-front government over reports regarding the scam. Even as a panel of the party probed and detected the scam much earlier, it was suppressed, Congress alleged.

While State Co-operation minister V N Vasavan had informed the Assembly that it was a Rs 104 crore scam, the Congress leaders, as well as whistleblower, alleged that it was a Rs 300-crore-scam happening over the past one decade. A 13-member director board with CPM local leader K K Divakaran as president that was running the bank was dissolved the other day.

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Scores of loans were given illegally issued through fictitious accounts based on fake documents. Even land deeds pledged by the customers were allegedly repledged illegally by the racket involving the banks administrators and real estate lobbies. Many even allege that their land documents were taken into possession by some agents by offering loans and were duped.

The scam came to light after some loanees who were regularly repaying as well as many who did not receive loans started receiving notices for default despite making regular payments. A person who received the default notice had even ended life by suicide the other day. A bank employee Suresh Kumar, who became the whistleblower, was expelled from the bank. Many of the victims of the frauds were also CPM workers and supporters.

While the local police initially registered a case and arraigned some bank officials as accused, the case was later transferred to the Crime Branch.

Chief Minister Pinarayi Vijayan said CPM can't be blamed for any party workers or leaders indulging in any illegal acts as the party would never tolerate such acts. Anyone involved in such illegal activities would face stringent action, he said adding that the government would initiate all steps to protect the credibility of the cooperative sector.