The Enforcement Directorate (ED) has attached assets worth ₹225.17 crore in a case of cheating against the Sree Kanva Souharda Co-Operative Credit Limited (SKSCCL), Bengaluru City, its founder N. Nanjundaiah and others. The accused had collected ₹650 crore from about 13,000 depositors on the promise of a high interest rate.
The attached properties include agriculture and non-agriculture land, buildings and resorts, besides the balance in the bank accounts of Mr. Nanjundaiah and his family members, the Kanva Group of companies and other entities.
The ED alleges that over ₹400 crore was swindled, diverted and also advanced as loans without any surety to the Kanva group Group owned by Mr. Nanjundaiah, which is still pending. The diverted funds were used by the accused to acquire more than 160 immovable/movable assets in his name and that of his family members and the entities owned by him. Some properties have already been disposed of.
The ED is pursuing the money laundering probe on a complaint from the Office of the Registrar Cooperative Societies, Bengaluru, and the FIRs registered at the Basaveshwara police station in Bengaluru City against Mr. Nanjundaiah, SKSCCL and others. The funds were collected through commission agents, without maintaining the required liquidity, as alleged.
“The accused advanced loans out of the deposits without getting any security, against the existing rules and regulations,” said an official.
Premises searched
The ED had conducted searches on the premises of Mr. Nanjundaiah and other directors of the SKSCCL and the Kanva Group. Mr. Nanjundaiah was arrested on August 25 and sent to seven-day custody of the ED for recording his statement under the Prevention of Money Laundering Act. He is currently in judicial custody.
According to the ED, Mr. Nanjundaiah had raised funds through unauthorised collection centres and agents by promising returns at the rate of 12 to 15%.
“The accused persons manipulated SKSCCL accounts and suppressed the actual financial position of the society. It was running under losses, but was projected to be in profit. Huge amounts were spent illegally on collection agents, centres, the Kanva Group of companies’ staff salary and other perks. They maintained very low liquidity in SKSCCL accounts,” the official said.
They made dubious entries, wherever required, in the cloud-based Zenith software, edited and submitted window-dressed report to the authorities. Mr. Nanjundaiah had got about ₹120 crore in loans from various banks and financial institutions, which are also outstanding, it is alleged.
