Valmiki scam hits close to home in Telangana, investors in fix

10,000 investors across TG unable to withdraw savings as First Finance Credit Coop Society Ltd’s chairman Itakari Satyanarayana is in jail

Mancherial: Around 10,000 investors of the First Finance Credit Cooperative Society Limited’s (FFCCSL) branch in Mancherial and 12 other branches across the State are in a dilemma on how to withdraw their savings after a Special Investigation Team (SIT) arrested the chairman of the firm and froze their accounts in connection with the multi-crore scam at the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation a few months ago.

First Finance chairman Itakari Satyanarayana from Bitturpalli in Bheemini mandal was arrested in June by the SIT on charges of assisting two suspects involved in the scam in opening 18 accounts in the bank. The SIT froze the accounts of the customers as part of investigations into the Rs 89.62 crore transferred into accounts of First Finance.

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Satyanarayana had established First Finance with its headquarters at Nallakunta in Hyderabad and administrative office at Chunnabattiwada in Mancherial town in 2019. Branches of the society were set up in Luxettipet, Manthani, Godavarikhani, Peddapalli, Karimnagar, Jagtial, Sircilla, Siddipet, Husnabad, Vijayawada and Tirupati of Andhra Pradesh. The branches reportedly have 10,000 customers. The society raised various deposits worth Rs 12 crore.

The investors of the society are now struggling to perform transactions with regard to fixed and recurring deposits, following the arrest of the chairman. However, recovery agents of the society are collecting repayments of loans from the customers by giving manual receipts. The administrative office is now staffed by an attender with employees quitting the society due to delay in salaries.

“I deposited savings at a branch of First Finance to perform my daughter’s wedding. But now I am unable to withdraw funds relating to a fixed deposit which reached maturity a few weeks back. Officials of the society told me that I would be able to do the transaction once accounts are unfrozen and only when the chairman is released from the jail,” an investor said.

The Valmiki scam

On May 26, the alleged unauthorised transfer of Rs 187 crore belonging to the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation came to the fore after accounts superintendent Chandrashekhar died by suicide at his residence in Shivamogga. Funds worth Rs.89.62 crore were allegedly transferred to some accounts of IT companies and 18 accounts of First Finance in Telangana, according to reports.

The SIT arrested JG Padmabha, the managing director and Parushurama Durgunnavar, accounts officer of KMVSTDC for their alleged role in the death of Chandrashekhar in May. The Karnataka government suspended Padmanabha and Parushurama for dereliction of duty, negligence and violation of financial rules on May 29.