K'taka Co-operative Bank scam: ED attaches assets to the tune of Rs. 45.32 cr under PMLA

On Friday, the Enforcement Directorate attached movable and immovable assets worth Rs. 45.32 crore in the Co-operative Bank fraud case in Karnataka. This includes bank balances and fixed deposits of the president, ex-vice president, ex-CEO and current CEO of Sri Guru Raghavendra Sahakara Bank Niyamitha, Sri Guru Sarvabhouma Credit Co-Operative Ltd. and their associates to the tune of Rs. 7.16 crore. Moreover, 29 immovable properties worth Rs. 38.16 crore belonging to K Ramakrishna, late T S Sathyanarayana, late M V Maiya, Santosh Kumar A and various other employees of Sri Guru Raghavendra Sahakara Bank Niyamitha and Sri Guru Sarvabhouma Credit Co-Operative Ltd.

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The ED's charge

The Banaswadi Police station in Bengaluru registered an FIR on February 2, 2020, against late M V Maiya and others for embezzling more than Rs.1500 crore under various sections of the Indian Penal Code and the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004. This money was collected by Sri Guru Raghavendra Sahakara Bank Niyamitha from a large number of depositors, especially senior citizens through fixed deposits by promising them a rate of interest ranging from 12 to 16% per annum. However, the accused persons reportedly withdrew money from the bank by creating fake loan accounts and did not repay the money to the depositors. 

The ED commenced its investigation based on this FIR. According to the agency, accused K Ramakrishna established the Sri Guru Sarvabhouma Credit Co-Operative Ltd in 2015 to avoid paying the Tax Deduction at Source which co-operative banks must pay as per the Income Tax Act. Crores of rupees were allegedly transferred from Sri Guru Sarvabhouma Credit Co-Operative Ltd to Sri Guru Raghavendra Sahakara Bank Niyamitha during 2016-2019. The ED stated that the money was sent to the NPA accounts of the bank to reduce the NPA parameter.

Late M V Maiya, the former CEO of the bank, has been accused of purchasing immovable properties in his name by diverting from the society and bank. Additionally, the agency has claimed 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 aforesaid movable and immovable properties have been provisionally attached under Prevention of Money Laundering Act, 2002 after being identified as the proceeds of the crime. 

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