Representative image showing a man's arrest.
Credit: iStock Photo
The Enforcement Directorate on Tuesday said it has arrested two persons in Kerala in connection with its ongoing money laundering probe linked to an alleged Rs 150 crore fraud in the CPI(M)-controlled Karuvannur cooperative bank.
Sathish Kumar P and Kiran P P were taken into custody on Monday and a special Prevention of Money Laundering Act (PMLA) court has sent them to three days of ED custody, the agency said in a statement.
The ED had conducted fresh raids in this case in Kerala last month including at the premises of CPI(M) MLA and former cabinet minister A C Moideen. The legislator has been summoned by the agency for questioning, but he is yet to appear before them.
This case of alleged fraud, beginning in 2010, in the Thrissur-based bank has triggered a political row in the state.
The money laundering case stems from 16 FIRs registered by the Kerala Police (crime branch) in Thrissur.
Kiran P P was the "beneficiary of illegally sanctioned loans in the names of benamis using benami properties and thereby generated proceeds of crime to the tune of Rs 48.57 crore including principal and interest which remained unpaid to the bank", the ED alleged.
Sathish Kumar P also committed the scheduled offence and generated proceeds of crime of more than Rs 14 crore in the form of illegal loans from the bank, it claimed.
The ED has said its probe found that 'on the instructions of certain persons, who were district-level leaders and committee members of certain political party and governed the bank, loans were disbursed by the bank manager through the agent in cash to non-member benamis by mortgaging properties of poor members without their knowledge and laundered to the benefit of the accused'.
"Many such benami loans were disbursed on the instructions of A C Moideen," it had alleged in a statement issued on August 23, a day after the raids were undertaken.
Moideen, 67, had told the press that the ED action was 'pre-planned,' adding he would cooperate with any investigation.
He is a former minister for cooperation and industries and currently represents the Kunnamkulam constituency in the state Assembly.
The ED had first carried out raids in this case in August last year at six locations, including a branch of the bank located in Irinjalakuda, Thrissur. It had attached assets worth Rs 30.70 crore of a commission agent of the bank, Bijoy A K.