THIRUVANANTHAPURAM: The Vigilance and Anti-Corruption Bureau (VACB) raided 40 branches of the KSFE on Saturday and found serious irregularities in 35 of them. While four branches were found to have committed fraud in sanctioning gold loans, 10 branches kept the pledged gold ornaments without proper security. Most branches failed to deposit the firstinstalment of new chitties in public sector banks or state treasury as prescribed in the rule.
Some branches were found to have allowed customers to participate in auction though cheques for their previous instalments had bounced. Interestingly, the inspection by the vigilance, headed by CM Pinarayi Vijayan, comes days before the local body polls. Finance Minister Thomas Isaac, who described the raids as "untimely", dismissed the charges made by the vigilance department as "nonsense".
The minister said he did not know who the insane person behind the raid was. He countered the sleuths observations that the branches violated the rule to park money in the treasury. "Which law says so? The vigilance need not prescribe law to the KSFE which has been functioning in the state for the past 50 years. The state has a law department to interpret law," he said.
KSFE: Vigilance suspects money laundering
The vigilance said many branches started new chitties with less number of customers than the prescribed. The sleuths are suspicious over the high demand for chitties of big monthly instalments — `2 lakh to `5 lakh. Some customers might be utilising them for money laundering, according to the officers. A few chitties were suspected to be in the name of benamis. While the finance minister and KSFE chairman are vociferously defensive, the enterprise did little on the CAG’s findings in its report on public sector undertakings for the year ended on March 31, 2018.
The audit report said some branches knowingly allowed private money lenders to repledge their ornaments with KSFE, that too violating the disbursal ceiling. “During the period 2015-16 to 2017-18, seven branches disbursed gold loans amounting to `156.78 crore to 11,430 loanees. Out of this, `66.44 crore was issued to 56 individuals through 30,370 gold loans.
These 56 borrowers who accounted for one per cent of the total loanees were disbursed 42 per cent of the total gold loans during 2015-16 to 2017-18,” it had said. The audit report had called for a detailed internal probe covering all branches which however was not undertaken by the KSFE. The CAG had also cited the huge NPA and delay in recoveries.