ED attaches Rs 45.32 crore worth assets of Bengaluru-based co-op bank, society in money laundering case

The Enforcement Directorate has attached assets worth Rs 45.32 crore belonging to the top functionaries of Bengaluru-based Sri Guru Raghavendra Sahakara Niyamitha and Sri Guru Sarvabhouma Credit Cooperative Ltd in connection with a case of defrauding depositors.

Of the assets attached under Prevention of Money Laundering Act 2002, immovable properties worth Rs 38.16 crore included agricultural land, residential apartments and houses held in the name of President K Ramakrishna, Vice President late T S Sathyanarayana, late (ex-CEO) M V Maiya, Santosh Kumar A and various other employees of the two companies. All are residents of Bengaluru.

The movable assets were in the form of bank balance and fixed deposits valued at Rs 7.16 crore in the name of president, former president, CEO, former CEO and others in both the entities. Ramakrishna and his family are absconding while Maiya died by suicide.

According to the ED, Sri Guru Sarvabhouma Credit Co-operative Ltd was established by Ramakrishna in 2015 "to avoid paying" the Tax Deduction at Source (TDS) which cooperative banks are required to pay under the Income Tax Act.

"During 2016 to 2019, crores of rupees were transferred from the society to the bank. President (Ramakrishna) and CEO (Maiya) were responsible for transferring the amounts from the said society to the NPA accounts of the bank to reduce the NPA parameter," it said.

The ED filed a money laundering case on the basis of an FIR filed by Banaswadi police station against Maiya and others on charges of embezzling more than Rs 1,500 crore collected from depositors, mostly senior citizens, through fixed deposits by promising them interest ranging from 12 to 16 %.

"The accused persons withdrew money from the bank by creating fictitious loan accounts and did not repay the money and committed a breach of trust and cheated the public at large. The proceeds of crime were found to be laundered in the name of many bank employees also," the ED said.

Ramakrishna, along with his wife and son, who is one of the Directors of M/s Mukhyaprana Agro Farming & Research Info Pvt Ltd, allegedly layered the proceeds of crime in the name of the company and also in the name of Sri Guru Sarvabhouma Credit Co-Operative Ltd by diverting funds from Sri Guru Raghavendra Sahakara Bank Niyamitha.

Maiya had also purchased immovable properties in his name by diverting funds from the bank and society, the ED said, adding that employees of the bank and society were also involved in diverting funds by creating fictitious loan accounts and purchased properties in their name and in the name of their associates.

The investigation conducted so far leads to the identification of the proceeds of crime in the form of movable and immovable properties, which have been provisionally attached under PMLA, it added.