ED has accused Kerala’s ruling CPI(M) in the Rs 300 crore Karuvannur Bank scam involving fake loans and money laundering. The party allegedly misused public funds, following similar action against AAP in the liquor scam.
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NEW DELHI: The Enforcement Directorate (ED) has now named Kerala’s ruling political party, the Communist Party of India (Marxist) or CPI(M), as an accused in the Karuvannur Co-operative Bank Scam.
This scam involves illegal handling and misuse of more than Rs 300 crore. The money was taken from customer accounts using fake documents and benami loans. Benami means something that is bought or held in one person’s name but actually belongs to someone else.
The ED has also named many leaders of the CPI(M), including K Radhakrishnan, who is a Member of Parliament, as accused in the case.
This is not the first time that ED has taken action against a political party. In May 2024, the ED had named the Aam Aadmi Party (AAP) and also included the then Delhi Chief Minister Arvind Kejriwal in the Delhi Excise Policy Scam case.
In that case, the Delhi High Court had rejected Arvind Kejriwal’s request to cancel his arrest. The court said that Section 70 of the Prevention of Money Laundering Act, 2002 (PMLA), can be used against political parties also. This section allows the law to apply to companies, and a political party is also seen as a kind of group like a company.
The judge, Justice Swarana Kanta Sharma, explained that according to Section 2(f) of the Representation of the People Act (RP Act), a political party is “an association or body of individuals” and according to Explanation-1 of Section 70 of PMLA, a company is also “an association of individuals.”
The decision has been challenged and the appeal is currently pending before the Supreme Court.
The Enforcement Case Information Report (ECIR) related to the Karuvannur Bank Scam was based on an FIR (First Information Report) filed by the Irinjalakuda Police.
As per the chargesheet filed by the ED, the Joint Registrar of Cooperative Societies in Thrissur conducted an investigation and found many problems in the bank. Several loans were given to people who were not even members of the bank, and fake addresses were used to give memberships. Many of these loans were given without any proper security or collateral.
In the chargesheet, the ED stated that, according to what was told by the former Manager and Secretary of the Bank, these benami loans were given as per instructions from the CPI(M) District Committee members who were in control of the bank.
The ED also looked into how the money was used and found that a part of the money from these illegal loans was used by different local and district committees of CPI(M).
The ED has claimed that this is a clear case of using illegal money that came from a scheduled offence. This makes it a case of money laundering under the PMLA.
“From the investigation and the evidences gathered it is clearly established that the accused persons committed the offence of money laundering as defined u/s. 3 of PMLA and they are liable to be prosecuted and punished u/s. 4 of PMLA and the attached properties involved in the money laundering are liable to be confiscated in terms of Section 8(5) of PMLA,”
-the chargesheet says.
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