MK Biju, former manager of Karuvannur Service cooperative bank is the kingpin of the Rs. 300 Cr loan scam reported from the bank in Thrissur.
The departmental probe conducted by Irinjalakuda cooperation assistant registrar Omana KL has unearthed several procedural irregularities in disbursing loans of Rs. 50 lakh and above.
Large scale manipulation of records including forging of signatures, absence of security and bypassing officials concerned happened behind the passing of each such loan and Biju was a common factor in all those.
Bijoy and Jills, two other employees of the bank, were also active partners of the cartel. Their friend Kiran who is not an employee of the bank had been part of several illegal deals related to availing unauthorized loans. The probe also found that the employees used the huge sums obtained as illegal loan for investing in tourism and retail business. Bijoy and Jills have investments in Thekkady and Munnar, besides managing a real estate business and running a wholesale grocery shop in their native place.
“The routine procedure for sanctioning a loan warrants the president, vice president and secretary to interview the applicant and examine documents about his repayment capabilities. If land is pledged as security, manager of the branch concerned and the director board member from the locality need to inspect the plot of land and do a valuation. But, these procedures were not followed in several loans of Rs. 50 lakh,” noted the departmental probe report.
“Only Biju had inspected documents and signed the inspection forms for several of the Rs. 50 lakh loans. The president has given a statement that his signature was forged in such documents. Though the manager of the branch concerned needed to sign documents related to loans in their jurisdiction, Biju signed the document bypassing branch managers in many such reports using his authority as manager,” said the report.
In his statement, president of the bank KK Divakaran admitted that practice of sanctioning loans of huge sum to employees who had real estate business was rampant in the bank. “This is a clear misuse of power entrusted on the director board,” the report said. The investigation doesn’t spare the secretary of the bank too.
“The secretary also failed miserably in discharging his duty of overseeing employees and even connived with the employees for illegal activities,” the report said.
When the internal investigators quizzed Biju with all documents, he confessed that he and Jills were jointly managing a real estate business and a wholesale grocery shop in addition to their jobs in the bank.
“He also admitted that for the purpose of those businesses, he used to avail loans in the name of others,” records the report. Biju also said he had invested funds availed as loans from the cooperative bank in the tourism venture, Thekkady resorts private limited, owned by his friend Ananthathuparambil Bijoy who had also worked as a collection agent for Rubco showroom under the bank.
It is estimated that Biju had availed at least 300 loans of Rs. 50 lakh each under the names of various members in the last 10 years.
Another major finding of the probe panel is that some employees used benami members to avail loans of large sum. Kiran P Pallathu (no 19873) is one such case individual probed. The report lists 46 loans, most of them of Rs. 50 lakh, amounting to a total of Rs. 22.85 crore availed by Kiran.
Though loans were passed in the names of different members, loan amount was credited to Kiran’s savings bank account in all these cases.
“Kiran availed loans in the names of his business partners and relatives. He admitted to having a liability of Rs. 13.8 crore. His membership form and introducer couldn’t be traced. He pledged the same land for availing different loans,” finds the report.