The financial irregularities in the Karuvannur Service Cooperative Bank in Thrissur and the allegations of money laundering, now under investigation by the Enforcement Directorate, have blown the lid off a scandal that has struck at the very roots of the cooperative sector in Kerala. The crisis has left the Communist Party of India (Marxist)-led government floundering for a solution.
The scale of the problem became apparent when reports trickled in that several cooperative institutions had failed to return deposits on maturity, and depositors had begun queueing up for their hard-earned money. The loan scam at the Karuvannur Bank that triggered the mess came to light when customers began complaining that they were lured into a debt trap by middlemen. The ED investigation later found that the middleman named as the main accused in the Karuvannur loan scam had laundered money through other cooperative banks too, mostly controlled by the CPI(M). The agency recovered unaccounted money worth several crores that the middleman had deposited in other banks and froze his accounts.
The CPI(M) found itself on the defensive when the ED arrested a local party strongman in connection with the money laundering case. The party responded by unleashing a scathing attack on the agency, accusing it of plotting to discredit the cooperative movement in Kerala for political objectives. The ED’s repeated questioning of former minister A.C. Moideen and the vice president of the Kerala Bank, M.K. Kannan, has had the CPI(M) with its back to the wall. Chief Minister Pinarayi Vijayan blamed the ED for amplifying the Karuvannur scam to malign the cooperative sector in the State.
