New India Coop Bank fraud: Six directors blame ex-chairperson

The EOW learnt of financial irregularities after the RBI had conducted a surprise inspection of the bank last month

MUMBAI: The Economic Offences Wing (EOW) of the Mumbai Police has questioned six directors on the board of the New India Cooperative Bank, in connection with the alleged misappropriation of ₹122 crore from the cash reserves of the scheduled bank. Police said all of them pointed a finger at former chairperson and vice-chairperson, Hiren and Gauri Bhanu, claiming that it was they who took major decisions and merely informed the directors of the same.

Thane, India - February 17, 2025: Third Day ,After the RBI imposed restrictions on New India Co-op Bank LTD,, Third day account holders had gathered outside the vasant Vihaar Thane branch of New India Co-op Bank Ltd to remove their valuables documents and gold from the bank's lockers on Monday, the Third day ,in Thane,in Mumbai, India, on, Monday, February -17, 2024. ( Praful Gangurde /HT Photo )

“We have started recording the statements of the bank’s directors, including Frederick D’Sa, who is also the leader of an autorickshaw union, Dr Kurush Paghdiwalla, Milan Kothary, Shiv Kathuria, Viren Barot and Vinit Upadhyay. Most of them claimed they were not involved in major decisions, which were taken by the Bhanus. They said they were told that ‘everything was fine in the board meetings’. The Bhanu family has left India for Abu Dhabi,” said a police officer with the EOW.

Police said they have issued Lookout Circulars for Hiren and Gauri Bhanu; Unnanathan Arunachalam, a solar panel businessman; and Kapil Dedhia, a Dahisar resident and neighbour of General Manager, Accounts, Hitesh Mehta, a prime accused arrested in the case.

“Mehta claims he gave ₹28 crore of the ₹122 crore he allegedly misappropriated from the bank to Hiren Bhanu; ₹40 crore to Arunachalam, who is on the run; and ₹10 crore to Dedhia, also on the run. We have issued LOCs against all four,” said the police officer.

Dedhia is a civil contractor and lives in the building where Mehta resides in Dahisar. Police said they have approached the forensic laboratory in Kalina and asked for time to carry out a Forensic Psychological Test on Mehta. “Mehta keeps changing his story, so we want to know if he is lying, which is why we want to administer the test,” said the officer.

Police also said they are in the process of identifying Mehta’s properties, which they will be attaching to recover the bank’s money. They will also approach the Reserve Bank of India (RBI) to understand what discrepancies the apex bank had noticed in the scheduled bank’s books as the bank had been under RBI supervision for a while before the scam surfaced.