An Enforcement Directorate (ED) raid on the Communist Party of India-controlled Kandala Service Cooperative Bank has put the ruling Left Democratic Front (LDF) further on the defence.
The inspection comes close on the heels of the ED’s move to extend the Karvunnur Service Cooperative Bank scam to prominent Communist Party of India (Marxist) leaders and their alleged frontmen, including chit-fund operators, in Thrissur.
A contingent of paramilitary forces gave proximate protection to the ED officials who inspected the Kandala bank and houses of former office-bearers, most of them CPI leaders, almost simultaneously on Wednesday. The agency also investigated a CPI leader and former bank president on money laundering charges. The ED investigators examined his house and a restaurant run by his son in the capital.
A government audit had pegged the depreciation in the bank’s assets at Rs 101 crore. The auditors also reportedly stumbled on brazen instances of loan fraud, exaggeration of the value of land put up as collateral for bank loans, using the same surety to sanction multiple loans to favoured persons, questionable restructuring of credit and nepotism in appointments.
The Cooperative department registrar handed over the report to the ED, triggering a case and subsequent inspections.
Earlier, scores of Kandala cooperative bank members had besieged the financial institution, demanding the immediate return of their savings. Television news channels repeatedly broadcast tales of ordinary cooperative society members unable to draw their money to meet life’s exigencies.
High-profile Enforcement Directorate (ED) probes against Communist Party of India (Marxist) [CPI(M)] leaders accused of using party-controlled cooperative banks as a front for money laundering have also not helped the LDF’s public image.
Disconcertingly for the ruling front, the Congress and Bharatiya Janata Party (BJP) have discerned a full-bodied political opportunity in the unfolding tales of misappropriation of funds, money laundering, organised corruption, loan fraud and nepotism that have beset the cooperative sector.
Low-interest and welfare-oriented credit societies have a direct and crucial bearing on the lives of lakhs of ordinary citizens, ranging from daiary and rubber farmers to coir, cashew workers, toddy tappers and weavers. Their beneficiaries carry considerable social and political heft and, as a crucial voting bloc, have traditionally hewed to the left.
