K. K. Abraham, former president of the Pulpally Service Cooperative Bank, Wayanad, who was arrested by the Directorate of Enforcement (ED) the other day, had played a key role in sanctioning loans by over-valuing the properties of applicants, according to the investigation agency.
The ED, which arrested him on Tuesday, began the investigation in the case following a First Information Report registered by the Vigilance and Anti-Corruption Bureau, Wayanad, against the governing body members and bank officials of the bank.
The investigation revealed that bank officials and its governing body members sanctioned enhanced loans without the consent and knowledge of the loan applicants by overvaluing the properties offered as collateral and the excess amount was given to Sajeevan Kollappallil, a private individual. The loans were not repaid by the applicants leading to a loss of Rs.5.62 crore for the bank, said a communication issued by the ED.
The proceeds of crime in the form of overvalued loan were deposited in the bank account of Mr. Kollappallil maintained in the bank and subsequently withdrawn in cash and siphoned off. Incidentally, Mr. Kollappallil was arrested on September 26.
Mr. Kollappallil utilised the proceeds of crime for ginger farming in Karnataka and Mr. Abraham was offered a profit share of 10 per cent though he didn’t have any investment. Investigation revealed the unexplained cash deposits in the bank account of Mr. Abraham and transfer of funds from the account of Mr. Kollappallil. Mr. Abraham, who had knowingly assisted Mr. Kollappallil in acquiring and using the proceeds of crime, committed the offence of money laundering, the communication said.
