The Gujarat H C has directed to arrest all the 33 accused-

Source:Anupam Chakravartty : indianexpress.:1 April,2010

Vadodara : The Gujarat High Court has directed the CID (Economic Offences) to arrest all the 33 accused beneficiaries in the Rs 70-crore scam in the Karamsad Cooperative Bank at Vallabh Vidyanagar by the end of next month. The court of Justice M R Shah dismissed CID’s plea to extend the investigation for another two months and asked the action taken report to be tabled by April 30.

After a seven-year long wait, the CID (Economic offences) took over the investigation from Vidyanagar police station and arrested nine people in the case, including five of the bank’s directors. Among them were former state minister Dilip Patel and former BJP MP Natu Patel. “Around 33 loan-takers are yet to be arrested as many of them have left the country,” said Deputy Superintendent of Police B J Jadeja.

However, Hitesh Patel, who had reportedly filed an RTI application seeking details of borrowers and guarantors, says that if borrowers are booked for misappropriation of Rs 70 crore from the bank, then the guarantors have to be nabbed. The RTI  reply shows that the arrests could go well beyond 240.

Meanwhile, in a February 26 ruling in the same case, Justice Shah had directed the CID to investigate the reasons for the bank’s liquidation. “But a more detailed investigation is required to find out why the Karamsad Urban Cooperative Bank Limited has gone into liquidation,” Shah said while passing an oral order.

According to the CID (Economic Offences), policemen from Anand and Ahmedabad, who investigated the issue in a span of six months found that the trustees involved their own relatives. “They gave loans to various parties, who had produced forged documents,” said a CID officer.

A report made by the Anand Economic Offences Detection Cell says that the bank gave loans violating guidelines laid down by the Reserve Bank of India. “The Bank also invested Rs 9 crore in Home Trade, which was against the directives of the Reserve Bank of India. The bank also extended loans to Keval Land Developers and Ghanshyam Patel on the basis of bogus documents,” wrote Inspector B J Pathan in the report made to the Gujarat High Court when the issue had come to the light.

Further, four persons, including a managing director of a farm implement manufacturing company based in Palanpur of Sabarkantha district, and his brother, were reportedly booked by the CID for producing fake bills for farm implements that were never bought, but approved by the bank trustees.