Yet another cooperative sector scam unearthed in Bengaluru, five held

Kuruhinashetty Souharda Credit Co-operative Society: Loans issued just on the basis of photocopies of documents, loans exceeding the value of mortgaged properties, multiple loans given on the basis of the same property to a few borrowers...

Hundreds of investors were cheated by the accused, police said, adding that the role of the board of directors, numbering 14-15, was also being investigated. (file)

The Bengaluru city police have unearthed yet another scam at a cooperative society, where irregularities allegedly exceeded Rs 90 crore. Five people have been arrested and more arrests are likely in the case.

According to police, the Kuruhinashetty Souharda Credit Co-operative Society issued loans to certain individuals without required documents. Apart from giving loans just on the basis of photocopies of documents, the cooperative society is also accused of providing loans exceeding the value of mortgaged properties. Police said that multiple mortgage loans were given on the basis of the same property to a few involved in the irregularities.

The accused are identified society president B L Srinivas, vice-president B N Eshwarappa, borrowers Dayanand Hegde and Chandrashekar P N, and B T Mohan, chairman of Surabhi Chits Limited, with which the society entered into an allegedly illegal agreement.

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The president, vice-president, chief executive and members of the society’s loan approval committee allegedly colluded to sell properties mortgaged by borrowers. The properties were allegedly sold to the relatives of those who held prominent positions in the society.

Hundreds of investors were cheated by the accused, police said, adding that the role of the board of directors, numbering 14-15, was also being investigated.

The accused are booked under various sections of Indian Penal Code, the Banning of Unregulated Deposit Schemes and the Karnataka Protection of Interest of Depositors in Financial Establishments Act.

In October, police raided the Shushruthi Co-operative Bank over an alleged scam. In September, an audit of Sri Guru Raghavendra Sahakara Bank Niyamitha unearthed misappropriation amounting to Rs 1,480 crore.

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