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In K’taka,a bank divides Muslim leaders

Allegations of corruption in a cooperative bank have split Muslim leaders of the Congress in Karnataka

Allegations of corruption in a cooperative bank have split Muslim leaders of the Congress in Karnataka into two warring camps. On one side,veteran leader C K Jaffer Sharief is demanding a CBI investigation into alleged misappropriation of more than Rs 150 crore from the Amanath Cooperative Bank,and on the other,supporters of Union Minority Affairs Minister Rahman Khan,the co-founder of the community-run bank,rubbish the charge as an attempt to malign him.

And caught between a rock and a hard place is the Congress government. Wary of loosing its electoral grip on the minority community,it’s treading cautiously,trying to balance the competing demands of the two camps.

Chief Minister Siddaramaiah visited Sharief Sunday and persuaded him to call off his hunger strike. Sharief,baked by some prominent Muslim leaders,including former minister Roshan Baig,had launched the strike last week after the government did not oblige him with an assurance of a probe into the fraud,revealed by a cooperatives department investigation,and the alleged role of Rahman Khan in it. He had claimed that since the Amanath plans to merge with the Canara Bank,all the people who defrauded the bank — the probe report named 10 — will go scot free despite the fact that hundreds of depositors have lost all their savings.

Siddaramaiah assured Sharief of “appropriate action” but did not promise a CBI probe as demanded by him.

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Rahman Khan’s supporters,however,point out that the minister was cleared of the allegation by the Karnataka police in 2003. His detractors’ campaign against him,they claim,is just a desperate attempt to protect their turf.

“There is a concern among a certain section of Congress leaders that Rahman Khan as minority affairs minister is set to emerge as a major Muslim leader and some of them are trying to protect their political interests,” a former Bangalore councillor said.

Account of trouble

The Amanath Cooperative Bank was set up in 1977 with 44,000 members,a share capital of 7.17 crore and Rahman Khan as the founding chairman. In March 2013,the bank,which is seeking RBI’s clearance to merge with Canara Bank,reported accumulated loss of Rs 102.12 crore. Some 2.40 lakh investors had put in a total of Rs 70 crore in the bank as of March 2013.

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In 2007,the cooperatives department reported that between 1992 and 2002 its management had misappropriated Rs 102.02 crore through grant of loans to fictitious persons. A second investigation into the bank’s working from 2002 to 2005,reported in July 2008,revealed Rs 54.77 crore more had been misappropriated.

In 2003,a probe by the Karnataka police exonerated Rahman Khan but charged managers and other directors with defrauding the bank. In December 2006,the government took over the bank and appointed administrators. In September 2012,elections were again held and the faction linked to Rahman re-gained control.

First published on: 06-08-2013 at 01:53 IST
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