Cooperative department officials detected alleged diversion of funds to the tune of ₹2 crore in the Jammalamadugu Town Cooperative Credit Society Limited in Kadapa district, popular as Jammalamadugu Town Bank.
They lodged a complaint against its chairman Tatireddy Hrishikesava Reddy, a close relative of Marketing Minister C. Adinarayana Reddy.
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Cheques bounce
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The issue came to light after 663 cheques of the society bounced when its customers presented them to the Axis Bank branch in Proddatur in the last few days.
Body dissolved
On a protest and complaint by the society customers, the department officials conducted an inquiry and dissolved the governing board of the town bank and appointed Jammalamadugu Divisional Cooperative Officer Subbarayudu as its special officer.
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The cooperative credit society has been receiving deposits from people and sanctioning loans under the Cooperative Act.
It operated its account in the Axis Bank branch at Proddatur.
The Minister’s brothers, former MLC Narayana Reddy was the honorary chairman and C. Sivanatha Reddy was the director while his brother-in-law Tatireddy Suryanarayana Reddy was the society’s vice-chairman.
Inquiry
The divisional cooperative officer conducted an inquiry and detected that the funds were diverted between March and August this year.
The official lodged a complaint with the Jammalamadugu police against Mr. Hrishikesava Reddy alleging that he diverted funds to the tune of ₹1.41 crore and personally utilised another ₹54 lakh.
Mr. Subbarayudu also issued orders under Section 73 of the Cooperative Act for the attachment of the assets and bank accounts of the society chairman.
Society CEO Balaji Srinivas reportedly admitted before the divisional cooperative officer that he had utilised the society funds of ₹5 lakh.
The Jammalamadugu police registered a case against Mr. Hrishikesava Reddy and took up investigation.