At least six former directors of the New India Cooperative Bank have told the Mumbai Police that they were unaware about the alleged embezzlement of funds worth ₹122 crore. The Mumbai Police's Economic Offences Wing (EOW) is actively investigating the illegal withdrawal of funds that reportedly occurred over the past five years, news agency PTI reported.
The directors, including Frederick D'Sa, Gauri Hiren Bhanu, Kurush Paghdiwalla, Milan Kothary, Shiv Kathuria, Viren Barot, and Vinit Upadhyay, were summoned as part of the probe. Notably, Gauri Bhanu, a former bank head, and her husband Hiren Bhanu, a former chairman, are among those wanted in connection with the case.
These directors claim the CEO and others misleadingly presented audit reports, assuring them that "everything in the bank was 'fine'".
The investigation has led to the arrest of former General Manager Hiten Mehta and ex-CEO Abhimanyu Bhoan, among others. The probe revealed that a portion of the embezzled funds was allegedly transferred to Manohar Arunachalam, son of a wanted accused, businessman Unnathan Arunachalam.
Manohar Arunachalam reportedly received ₹40 crore, which was deposited in the account of his firm, Magas Consultancy, and later routed back to Mehta. Manohar claims to have provided an unsecured loan to Mehta, a point currently under verification by the EOW.
The Reserve Bank of India (RBI) imposed several restrictions on New India Cooperative Bank in mid-February after the fraud surfaced, although some restrictions have since been relaxed. As the investigation unfolds, the EOW has reached out to the RBI to ascertain the circumstances that led to their inspection of the bank. Four individuals, including the Bhanus, have been declared wanted in connection with this case.
It is reported that Bhanu Hiren fled to Abu Dhabi, while Gauri exited to a South Asian nation just days before the scam emerged.
The scandal has cast a shadow over the bank's operations and regulatory compliance, with the RBI's actions underscoring the severity of the case. These developments highlight ongoing challenges within the cooperative banking sector, which faces scrutiny and reforms aimed at enhancing transparency and accountability. The outcome of this investigation could have significant implications for the regulatory framework governing cooperative banks in India, as authorities seek to prevent such incidents in the future.
(With inputs from PTI)