KSFE society scam victims yet to be paid

Cabinet had asked KSFE to clear part of the amount due to the depositors

Hundreds who had deposited their life’s savings in the Kerala State Financial Enterprises (KSFE) Staff Cooperative Society and were allegedly defrauded by the society office-bearers over three years ago are yet to get relief despite the Cabinet deciding almost seven months ago to pay a part of the amount due to them.

Among the 650-odd families defrauded to the tune of Rs.19 crore, many are finding it hard to make both ends meet. Following several petitions, the Crime Branch had launched an investigation into the alleged fraud and arrested four KSFE personnel, who were office-bearers of the cooperative society at the time of the incident, in July 2013. They were charged with cheating, fraud, embezzlement and criminal conspiracy.

When they were produced before the Additional Chief Judicial Magistrate Court here, the Crime Branch told the court that the KSFE personnel, all of them manager rank officials, had forged fixed deposit certificates and produced these as collateral to draw loans from the society. They had also allegedly tampered with account books to show that the society, which was running on loss, was registering profits. The case is still pending disposal.

On September 10 last, the State Cabinet stepped in and directed the KSFE to immediately sanction Rs.11.80 crore to the cooperative society to clear part of the amount due to the depositors. The government also issued an order giving effect to the Cabinet decision. However, the KSFE director board refused to heed the Cabinet directive. Simultaneously, the cooperative society moved the Kerala High Court and secured an order for maintenance of status quo ante.

With the government doing precious little to get the High Court’s order reversed, there was little the depositors could do but wait patiently. However, some among them, like M. Rajendra Babu of Manacaud in the city, who had deposited around Rs. 20 lakh in the society in his, his wife’s and daughter’s names, were not prepared to take things lying down.

He and his family moved the Kerala Lok Ayukta and secured an order directing the cooperative society to pay the money due to them. Although the cooperative society approached the Lok Ayukta seeking review of the decision, Upa Lok Ayukta K.P. Balachandran rejected the petition on March 29. But there is still no sign of the government forcing the cooperative society to pay up.

“The society owes us around Rs.19 lakh. I don’t know if I should live or die,” says a dejected Mr. Babu.