ED arrests ex-chairman of Karnataka cooperative bank in ₹63 crore fraud case

The central agency suspects large-scale diversion and misuse of funds during R M Manjunatha Gowda’s tenure as chairman.

Published on: Apr 10, 2025, 08:31:56 IST

By HT News Desk

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The Enforcement Directorate (ED) on Wednesday arrested R M Manjunatha Gowda, former chairman of a Karnataka-based cooperative bank, in connection with alleged financial irregularities amounting to ₹63 crore at one of its branches.

According to news agency PTI, Gowda was taken into custody under provisions of the Prevention of Money Laundering Act (PMLA) and produced before a special court in Bengaluru. The court remanded him to ED custody for 14 days, the agency said in an official statement.

The arrest follows a series of raids conducted by the ED on Tuesday across locations in Bengaluru and Shivamogga districts. These raids were part of an ongoing investigation into suspected financial misconduct at the Shimoga District Co-Operative Central Bank, specifically at its City Branch.

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The central agency suspects large-scale diversion and misuse of funds during Gowda’s tenure as chairman. Further details of the case are expected to emerge as the investigation progresses.

"Large-scale misappropriation of funds took place at the said branch which was orchestrated primarily by the branch manager, B Shobha, on the instructions of Gowda," the ED alleged according to PTI.

The two and their legal representatives could not be contacted for comment on the ED's charges.

According to the chargesheet filed by Lokayukta Police (of Karnataka Police), the ED said, Shobha "in conspiracy" with other co-accused "diverted" ₹62.77 crore.

The modus operandi involved opening "fraudulent" gold loan accounts without the knowledge of individual account holders and using fabricated documents, the agency said.

The "proceeds of crime" generated by Shobha in conspiracy with other co-accused were "laundered" and handed over to Gowda, it said.

Gowda acquired various movable and immovable properties, the agency said, adding the Lokayukta Police chargesheet recorded that he was in "possession of assets disproportionate to his known sources of income".

(Also Read: BJP MLAs urge Speaker to withdraw their suspension from Karnataka Assembly )

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