MUMBAI: An investigation by the Enforcement Directorate (ED) into the alleged embezzlement of ₹ 122 crore from the New India Co-operative Bank (NICB) has revealed that one of its officials played a key role in siphoning off the funds.
The ED’s investigation also revealed that an accused, acting in connivance with some Indian borrowers of the bank, acquired overseas business entities without paying any sale consideration, and subsequently also arranged to receive funds in the borrowers’ accounts. The ED’s investigation is based on a case registered by the Economic Offences Wing (EOW) of the Mumbai Police in connection with the ₹ 122-crore embezzlement. The investigation further established that these activities were also allegedly carried out at the behest of Hiren Bhanu, former chairperson of the bank, and the former vice-chairperson. Bhanu exercised control over the bank’s operations for several years, directly as well as indirectly through associates and family members. Bhanu has also been charge-sheeted in the case. The ED recently submitted a charge sheet against Mehta and seven others in the special court, which directed the issuance of pre-cognisance notices to all the accused. The transactions came to light during a Reserve Bank of India risk assessment, which first flagged the suspected misappropriation. The EOW has already filed its charge sheet, and a non-bailable warrant along with proclamation proceedings have also been issued against Bhanu. The ED is conducting a further investigation to trace the funds diverted from the bank to individuals/ entities.
ED officials said that substantial loans were sanctioned by the bank to such borrowers. “A few accused are currently outside India and have not cooperated with the investigation,” an official said.
