ED attaches properties worth ₹16.95 crore in co-operative society scam

The Directorate of Enforcement (ED), Bengaluru Zonal Office, has provisionally attached 11 immovable properties worth ₹16.95 crore belonging to Srivaibhava Sourhardha Pattina Sahakari Niyamitha president Nagavalli B.S., CEO Rajesh V.R., and their associated entities under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.

According to a release issued on Saturday, the attachment order was passed on February 12. The properties, comprising land, plots, and buildings located in Ramanagara, Mysuru, and Bengaluru, were allegedly acquired using proceeds of crime generated through criminal activities.

The ED initiated an investigation based on an FIR registered by Subramanyapura Police Station, Bengaluru, against Srivaibhava Sourhardha Pattina Sahakari Niyamitha, Nagavalli, Rajesh, and others. The FIR was filed following a complaint by the Managing Director of Karnataka State Federal Co-Operative Ltd.

As per the complaint, the society had sanctioned loans to entities owned by its president and CEO without obtaining proper security. The loan amounts were allegedly not repaid, resulting in wrongful loss to depositors.

During the investigation under the PMLA, the ED gathered additional FIRs and charge sheets filed by the police against the accused society and its key management personnel. The probe revealed that Rajesh and Nagavalli had incorporated the co-operative society in 2011 with dishonest intent to mobilise public deposits and divert them for personal gain.

Investigators allege that in collusion with other accused persons and entities — many of which were allegedly created by them — the couple diverted approximately ₹65 crore of public deposits, thereby generating proceeds of crime. A substantial portion of the funds was allegedly routed through their personal bank accounts and fictitious entities for the purpose of money laundering.

The diverted funds were allegedly used for purchasing immovable properties, business investments and personal consumption.