The State Cooperative Bank served a recovery notice on Coirfed, the apex body of coir cooperatives in the State, here on saturday.
According to officials, the notice was served based on proceedings over the non-payment of a loan of Rs.22 crore availed of from the Cooperative Bank by Coirfed way back in 2003. The loan, along with interest, had accumulated to Rs.46.54 crore in 2009 and in January 2009, Coirfed was asked to repay the loan. However, there was no response from the body, finally leading to the bank serving notices that the assets of Coirfed, including the regional office premises at Kollam and the yarn division at Alappuzha would be seized if the sum was not repaid within 60 days.
The loan is said to have been taken in the name of the Coirfed managing director. Leader of Opposition V.S. Achuthanandan's son V.A. Arun Kumar was the MD at that time.
Officials, however, ruled out any malpractice in the non-payment of the loan, pointing out that Coirfed had been in the red for the last several years. A meeting of the Coir and Cooperation Ministers was scheduled to be held later this month to sort out the issue, they said.
