Funds embezzlement in Khammam DCCB

The previous managing committee, Board of Directors and president allegedly embezzled funds to the tune of Rs 7.32 crore. The irregularities came to the fore during an enquiry by Additional Registrar/Chief Auditor, V Sumitra.

Khammam: Large scale misappropriation of funds and irregularities were found during the tenure of the previous managing committee of Khammam District Cooperative Central Bank (DCCB).

The previous managing committee, Board of Directors and president allegedly embezzled funds to the tune of Rs 7.32 crore. The irregularities came to the fore during an enquiry by Additional Registrar/Chief Auditor, V Sumitra.

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The official probed into the matter following a complaint lodged by a group of farmers from Penuballi and Sathupally mandals in the district. The enquiry report was communicated to the bank on March 27 and it was placed in the bank’s general body meeting held on March 28.

The enquiry report held the entire Board of Directors, the president Muvva Vijay Babu and CEO, V Vasantha Rao served for the relevant period responsible, jointly and severally, for the irregularities.

The Additional Registrar, Sumitra in her report highlighted 12 main irregularities that were against the NABARD and other regulatory agencies’ guidelines and bye-laws of the DCCB.
She said a loss of Rs 55.98 lakh was caused by expenditure on study tours though the legal provision made for the purpose was only Rs 4 lakh. Further, there were no records or reports related to the study tours available.

In a bizarre act, an amount of Rs 63.15 lakh was misused for gifting silver articles to the chairman, directors and household articles to employees at the bank’s meetings instead of sharing profits with bank’s members in the form of dividends or bonus.

Similarly, a loss of Rs 6.13 crore was detected due to the money collected as contributions towards RSN Trust and Hospital, established against the bank’s bye-laws and RBI guidelines, and were transferred to the trust that falls out of the ambit of the Cooperative Act.

The process of registering a trust and setting up a hospital, without proper knowledge and expertise of hospital management, was meant to earn political mileage and to siphon off the funds in the guise of service to the farmers.

Loans were sanctioned indiscriminately concentrating the financial resources on a few people connected with the management and the loans thus sanctioned were categorised as Non-Performing Assets (NPAs), the report said.

Additional Registrar recommended civil and criminal action against the previous managing committee and CEOs in addition to the recovery of the entire amount through surcharge under Section 60 of the Telangana Cooperative Act and remit the society wise contributions.

When contacted the incumbent CEO, Atluri Veera Babu informed on Monday that the general body discussed the findings of the report and approved it. The minutes of the general body would be sent to the Cooperative Department for further action.