Chit fund irregularities: Vigilance conducts surprise raids in KSFE’s offices, suspects money laundering

THIRUVANANTHAPURAM: Vigilance conducts surprise raids in various branch offices of state government’s chit fund institution—KSFE. The raids which were conducted under the code name operation ‘Bachat’ will continue on Saturday also. The raids were undertaken on the complaints that rampant irregularities are going on in the financial institution with the silent permission of branch managers.

The raid has revealed gross violations of laws and procedures. Vigilance has found out that funds have been misappropriated and they were used to launder black money, with the nod of branch managers of the chit fund firm. The department has also discovered that when the large chit fund projects of KSFE finds no takers, its managers will join the chit fund projects under secret names and pay the chit fund using the money from KSFE’s own chit finds. They also make bogus financial reports to hide this scam.

The department has also noted irregularities in the gold loan programmes from four branches of KSFE. Vigilance has also found that the gold kept as security was also not kept in a safe manner. Officials said that they will file a report to the government over irregularities in KSFE’s branches and the measures to be taken against the guilty officials.