ED in Karuvannur case: Will return Rs 108 crores seized from accused to depositors

KOCHI: The Enforcement Directorate (ED) has announced that the property and money seized from the accused in the Karuvannur Co-operative Bank fraud case will be returned to the defrauded depositors. ED had seized properties worth 108 crores from 54 accused.

Mahadevan, a depositor, had approached a special court dealing with the Prevention of Money Laundering Act (PMLA) in Kochi, seeking to grant him the money he had lost from the bank from the money confiscated from the accused. The ED expressed its willingness to return the money to the depositors in the affidavit it submitted yesterday in this petition. Mahadevan has a deposit of Rs 33,27,500 in the Karuvannur Bank.

The ED has found that the accused had committed fraud of Rs 300 crores in the Karuvannur bank by conspiring and forging documents. According to the ED's affidavit, the accused had invested the money siphoned from the depositors in real estate and business sectors.

Law to the aid of the deceived

1. According to the new law amendment brought to the Prevention of Money Laundering Act, the properties and investments seized during the investigation in the fraud cases can be returned to the victims of the fraud. The PMLA court has jurisdiction to take action for this even at the trial stage of the case. The confiscation will be made permanent if the appeals of the accused are dismissed by the Delhi appellate authority.

2. The auction procedure may be decided upon by the PMLA court. As the bank itself is standing in the defendant's position, writing the selling deed in the bank's name in compliance with cooperative law and having the bank conduct the auction is unlikely to occur in this case.

3. The depositors have to get Rs 300 crores. ED has seized assets worth 108 crores. The best solution is to seek the approval of the High Court after the arbitrator appointed by the court evaluates the value of the assets and prepares the priority order of those who need to get money. Money can be returned to the depositors by raising the money through an auction process following the guidelines of the High Court

4. Meanwhile, the Rs 7.10 lakhs obtained by auctioning the two vehicles confiscated by the Crime Branch in the Karuvannur case have been submitted in the court. Karuvannur Bank will file an application in court to get this money.