The CEO and 20 directors of the Health and Family Welfare Department Employees’ House Building Co-operative Society Ltd are facing legal action.
The Registrar of Cooperative Societies (RCS) has ordered criminal action against the board and the developer for allegedly defrauding 2,781 investors.
The co-op is accused of not delivering any sites despite collecting Rs 180 crore from members. The registrar discovered 25 serious lapses in the administration of the co-op during its probe under Section 68 of the Karnataka Cooperative Societies Act.
Rs 180-crore scam?
Between 2011 and 2015, the society signed multiple agreements with M and M Bangalore Pvt Ltd to develop three housing layouts: one in Mysuru and two in Bengaluru. The society deposited over Rs 180 crore without taking any surety or registering the land.
However, the members were not privy to these agreements.
The society is accused of signing four agreements with the developer without obtaining approval in the annual general meeting and revising the agreement without taking the consent of the directors.
Shankar Nayak, president of the society, said they are preparing the compliance report and would comment on the issue shortly.