For his role in the multi-crore Karuvannur Cooperative Bank fraud case rocking Kerala, Enforcement Directorate (ED) officers arrested municipal councilor, CPM leader, and health standing committee chairman of the Wadakkanchery municipality P.R Aravindakshan.

C.K Jils, a former senior accountant for the bank, was also taken into custody. Jils is accused of stealing approximately 5.75 crore rupees from the bank by using loans in the name of other people. His employment at the bank spanned from 2010 until 2018.

An ED team led by investigation officer S G Kavitkar detained the political middleman from his house in Wadakkanchery this afternoon. Aravindakshan is accused of money laundering through Karuvannur Bank. The accused was taken to the ED office in Kochi for further questioning and later arrested.

ED informed the Prevention of Money Laundering Act, 2002 (PMLA) Special court in Kochi that an analysis of Aravindakshan’s dealings revealed large cash transactions in his bank account from 2015 to 2017. The CPM leader claimed that the source of income was the honorarium received as a councilor of the Wadakancherry municipality. Despite numerous requests, he failed to present a copy of his income tax returns.

According to the investigation, Aravindakshan intentionally accepted more than Rs 50 lakh, knowing fully well that they were criminal gains. Additionally, other fraudsters used Aravindakshan to invest the crime proceeds in several benami companies and assets. The agency calculates that after false loans were given to multiple people, more than Rs 300 crore was stolen from the bank.

Karuvannur Bank Manager Biju Kareem also gave the ED a statement critical of Aravindakshan. According to the ED report, he said that Aravindakshan and Madhu threatened him and his family when they requested to place Rs 50 lakh in a fixed deposit in their names from the loans given to Satheeshkumar.

Aravindakshan, a CPI(M) local committee member and a close aide of CPM leader and former Minister A.C. Moideen, is the first political leader to be arrested by ED in connection with Karuvannur. Earlier, the ED questioned Moideen MLA and CPI-M state committee member MK Kannan on their suspected participation in the fraud.

After an earlier interrogation, Aravindakshan alleged that the ED officials forced him to give a false statement by physically assaulting him with sticks on 12 September. He complained to the Ernakulam Central police and got himself admitted to hospital. The Kochi city Police Commissioner even sent a Central police station Circle Inspector to ‘investigate.’

Even communists did not believe that ED would use lathis to pry out a confession in this day and age. ED officers said Aravindakshan had left the office in a cordial atmosphere. The ED interrogation is documented visually and audibly. The questioning room has a CCTV recording facility, and dozens of CCTV cameras are in the office building.

Aravindakshan filing the police complaint on 20 September also did not help the communist cause. Sending a comparatively low-ranked officer to ‘investigate’ high-ranking ED officials seemed embarrassing. Kerala police quickly understood the trap, and that ended Aravindakshan’s ED atrocities complaint. Right after this, Aravindakshan has now been taken into custody.

The Kerala High Court had previously dismissed the FIRs that the crime branch had filed against ED officers for implicating Chief Minister Pinarayi Vijayan in the 2020 Thiruvananthapuram gold smuggling case. This time, ED officers informed Kerala police that they would only proceed as per their Delhi ED office’s instructions.

Reportedly, ED informed the PMLA Special Court in Kochi that Aravindakshan and another CPI-M Wadakkancherry councilor, Madhu, assisted money lender P. Satheeshkumar, the primary accused. The loan shark is charged with employing benami borrowers to obtain fraudulent loans from Karuvanur Bank. Satheeshkumar’s money-lending business is allegedly worth roughly Rs 500 crore.

It is also claimed that Aravindakshan acted as an intermediary for Satheeshkumar to obtain loan-related documents from borrowers with mortgages at Karuvanur Bank. According to the ED’s report submitted to the court, Satheeshkumar’s goondas threatened the loan defaulters. Aravindakshan and Madhu, both CPM members, allegedly mediated such acts.

Many complaints were raised against Satheeshkumar for money laundering. Arvindakshan was the mediator who resolved these issues. Apart from this, ED has also found that Aravindakshan arranged an illegal payment of Rs 3 crore from Karuvannur Bank to Satheeshkumar. According to ED, Aravindakshan resolved the issues between Satheeshkumar and P.P Kiran (another accused fraudster). Kiran had reportedly swindled Rs 14 crore, said the report.

In early September, ED arrested Satheeshkumar and P.P. Kiran in connection with the Karuvannur Service Cooperative Bank corruption case under the provisions of the PMLA. The agency had also named Moideen as having played a significant role in recommending the disbursement of illegal loans.

The agency informed that its investigations revealed that loans were disbursed by the bank manager through the agent in cash to non-member benamis by mortgaging members’ properties without their knowledge. Such loans were issued on instructions of district-level leaders and committee members of certain political parties, said the communication without naming the CPI(M).

It went on to state that many such benami loans were disbursed on the instructions of Moideen. The agency had also frozen the fixed deposits and bank accounts of Moideen and his wife following the raid. The former minister and MLA skipped the interrogation on 18 September, citing official reasons.

The ambit of the ED probe is to be widened to 45 cooperative banks across the state, and there are allegations the CPM leadership is trying to delay the investigation by taking the legal route.