Secretary vanishes after siphoning & robbing half the assets of CPM-controlled coop bank

Kasaragod: CPM leaders in Kasaragod, led by district secretary C H Kunhambu, were in a huddle the whole day to find a way out of the latest bank fraud to hit the party.

Ratheeshan K (38), secretary of Karadka Agriculturist Welfare Cooperative Society for the past 12 years, has vanished into thin air after wiping off half the assets of the small bank.

The 17-year-old society in Karadka, controlled by the CPM, has a total deposit of only around Rs 9 crore, a cash credit (CC) line of Rs 3 crore from Kerala Bank, and a loan outgo of Rs 11 crore. Of that, Ratheeshan is accused of defrauding Rs 4.76 crore from the society.

His last act on May 9 was daylight robbery, said Kunhambu, Udma MLA and CPM's state committee member. "This is the biggest robbery. Bigger than Karuvannur. A crime which does not deserve forgiveness," he told Onmanorama. (To be sure, the CPM-controlled Karuvannur Service Cooperative Bank in Thrissur district saw a loan fraud of at least Rs 100 crore.)

However, CPM is mighty miffed with the Karadka fraud because it gave Ratheesahan a chance to make amends and return the money when it first came to know of the irregularities committed by him. But Ratheeshan -- a member of the CPM's Karadka Local Committee and an active social worker -- used the opportunity to walk into the bank, threaten two female staffers and disappear with gold jewellery worth Rs 1.12 crore. The jewellery was pledged by 41 persons.

Ratheeshan defrauded the bank in three ways: one, he took gold loans worth Rs 1.68 crore in the names of his close relatives and fictitious names without pledging gold jewellery; two, he diverted Rs 1.96 crore of cash credit from Kerala Bank; and three, he robbed jewellery worth Rs 1.12 crore. "No one in their dreams thought he would scoot with the gold," said a member of CPM's Karadka Area Committee and former president of the Farmer's Welfare Society.

Asked why the police were not informed immediately, party leaders said they assumed that Ratheeshan left the bank with some documents on May 9, a Thursday. "May 11 was the second Saturday, May 12 was Sunday. We called in the officials from the department on Monday, May 13. They audited the jewellery and found gold missing and asked the bank president to approach the police," he said. CPM leaders were silent on why they did not approach the police or the department on May 9 or 10.

Around 6.45 pm on Monday, May 13, Adhur Police registered an FIR. Based on a complaint filed by the society's incumbent president Soopi K, Adhur Police have booked Ratheeshan under Section 409 of the IPC for criminal breach of trust by a banker and Section 420 of the IPC for cheating. If convicted, he may face a prison term between 10 years and a life term. CPM leaders said that Ratheeshan single-handedly orchestrated the multi-crore fraud.

According to the FIR, the financial fraud and robbery were committed between April 29 and May 9, 2024. Even officials of CPM-controlled cooperative societies find it hard to digest that 50% of the bank's assets were moved in 12 days without anyone's notice. "For any transaction, two employees are needed -- one employee to initiate the transaction and one to approve it," said an official of a CPM-controlled cooperative bank in Kasaragod's Manjeshwar. He also asked how gold loans were released without jewellery being appraised by the appraiser.

But Sigi Mathew, who heads the CPM's Karadka Area Committee, insisted that Ratheeshan was a lone wolf. "Even his parents or wife were in the dark. The money siphoned from the society has not been invested in the family," he said. Mathew believed Ratheeshan was trapped by some real estate mafia or a money-doubling mafia. "We believe he is in Bengaluru. If the police did not arrest him soon, his life would be in danger," he said.

How the fraud unravelled
Udma MLA C H Kunhambu said sometime around April 29, the officials of the Department of Cooperation detected a financial irregularity of Rs 11 lakh during their routine inspection. "Ratheeshan immediately agreed to pay it," he said.

Later, the officials found that gold jewellery for loans amounting to Rs 1.68 crore was missing from the bank. That was when the society asked Ratheeshan to go on leave and repay the money in one week. "He showed us the title deed of a four-acre farmland in Mananthavady and sought time to dispose of it and repay the bank," said the former president of the bank. The CPM obliged as it was eager to wrap up the matter without making the irregularities public.

But soon the officials of the Department of Cooperation found out about Ratheeshan diverting Rs 1.96 crore from the cash credit extended by Kerala Bank.

Kerala Bank has extended Rs 3 crore of cash credit to the Karadka Farmers' Welfare Cooperative Society. Ratheeshan as secretary of the society got the signature of the president Soopi on cheques and got the money transferred directly to the accounts of fictitious beneficiaries, said Sigi Mathew.

By then, the CPM asked one of the board of directors to always be present in the bank always to ensure Ratheeshan never came to the bank. The party also made the night watchman's job round-the-clock.

On May 9, around 2 pm, when the director went home to have his gruel, Ratheeshan walked into the bank, threatened two female employees and emptied the locker.

'Department, party failed people'
According to several officials of cooperative banks, the fraud was another example of the failure of the CPM and the Department of Cooperation.

The department had issued strict guidelines asking the boards of directors to audit the gold jewellery pledged with their respective cooperative societies. "They have to not only tally the number of pieces of jewellery with the loans sanctioned but also check for the purity of the jewellery," said an employee. "If the board of directors had done their job, this fraud would not have happened," he said.

Several CPM leaders who are in the know of Karadka bank fraud said that Ratheeshan had committed loan fraud in 2020, too.

After the Karuvannur loan fraud, the Department of Cooperation has directed assistant registrars in every taluk to form an inspection team with audit inspectors and check at least six to eight societies every month. "Those inspections are also not happening," he said.

On top of that, unit inspectors of the department must audit the finances and administration once in every quarter. "They can check the gold stock, loan outstanding, repayment and inspect the minutes of the board meetings," said an employee of another CPM-controlled cooperative society in Kasaragod.

The officials said that the Department of Cooperation often fails to do its job when the societies are controlled by the CPM. "It is a reflection of the party's unwarranted influence on the running of cooperative banks and the department officials' convenient subservience," said the official quoted above.