ED names CPI(M) as accused in Thrissur Karuvannur Cooperative Bank case

The Enforcement Directorate (ED) on Friday named the CPI(M) as an accused in Kerala's Karuvannur Cooperative Bank money laundering case. The agency has been investigating allegations of a multi-crore loan scam at the cooperative bank in Thrissur.

The agency's report claimed that the party had received money that was laundered from the bank. An official said the ED seized assets worth Rs 29 crore and also the accounts in the name of CPI(M) Thrissur district secretary M.M. Varghese.

According to information, around eight accounts of the CPI(M) in several branches were confiscated by the agency — two fixed deposit accounts of the Thrissur district committee, one of the party's Irinjalakkuda area committee, and five "bogus accounts".

In April, the Central probe agency had extended its investigation to the party's local committees after it was revealed that more local and branch committees in the Karuvannur region have received a share of the money swindled from the bank. Varghese was questioned in connection with this probe.

The scam has raised serious concerns about the integrity and regulatory oversight within Kerala’s cooperative banking sector.

The issue, which came to light in 2010 in the CPI(M)-controlled bank in Thrissur, triggered a political row in the state as bogus loans were reportedly sanctioned by the bank against the same property multiple times, without the knowledge of the society members.

An investigation revealed that benami loans were sanctioned to non-members against inflated property valuations in the names of other members, and such loan funds were siphoned off and laundered by the accused beneficiaries.

A chargesheet was filed by the ED in November 2023 against a total of 55 accused entities as part of the money-laundering probe linked to the Karuvannur Service Cooperative bank. As of now, four people have been arrested by the ED in this case.

"On the instructions of certain persons, who were district-level leaders and committee members of certain political party and governed the bank, loans were disbursed by the bank manager through the agent in cash to non-member benamis by mortgaging properties of poor members without their knowledge and laundered to the benefit of the accused," the ED report said.

In April, ahead of the Lok Sabha polls, the ED summoned Varghese for interrogation. The notice was apparently part of the ED’s second phase of its probe into the scam, which has upset the CPI(M).

Earlier, the ED had questioned CPI(M) leaders, including MLA and former minister A.C. Moideen, and Kerala Bank vice-president M.K. Kannan. The Kerala High Court too had criticised the ED on 18 March for the delay in probing the scam. The court then directed the agency to file the case details and not keep the investigation pending forever.