Even as a Crime Branch probe is on into the alleged loan fraud at the Mylapra Service Cooperative Bank in Pathanamthitta, an internal investigation has suggested that the accused embezzled huge amounts through loans to relatives. The alleged misappropriation occurred in the 2005-2021 period.
A report of the investigation held under Rule 65 of the Kerala Cooperative Societies Act has suggested that former bank secretary Joshua Mathew alone siphoned off ₹18.83 crore by passing 28 loans. These include seven loans granted to his two daughters and six loans to his sister-in-law. Mr. Mathew had been associated with various factions of the Kerala Congress before joining the Congress, which expelled him following the scam.
Former bank president Jerry Oommen Easo and his family too have taken loans worth over ₹2 crore rupees from the bank. Similarly, ₹6.34 crore has been granted as loans to one John George of Vazhamuttom and his associates. Mr. Easo was associated with various Kerala Congress factions before joining the CPI(M), which expelled him once the scam came to light.
Ten times the value
Official sources said several of these persons were interrogated by the Crime Branch and they testified that they had absolutely no idea about the granting of these loans. The report also suggested that several loans were issued against the security of a single property and many loans amounted up to ten times the actual value of the security.
Commenting on the report, Geevarghese Tharayil, a former director board member of the bank and the complainant in the case, alleged that the fraud had been committed in collusion with the former auditors of the bank. “That none of the bank’s auditors, inspectors, and joint registrars took notice of this scam for 15 years itself points to their involvement,’’ he said.
89 benami loans
Meanwhile, a Crime Branch unit is proceeding with its investigation into a complaint by the Cooperative Society Joint Registrar that the bank incurred losses amounting to ₹86.12 crore by granting 89 benami loans.
Acting on the complaint, the investigation agency carried out raids at different locations in Pathanamthitta earlier this week. Besides the loan scam, the Crime Branch is also probing an alleged scam worth ₹3.94 crore in the purchase of stocks for a food processing factory functioning under the bank.
