The multi-crore loan scam centred around the CPI(M)-controlled Karavannur Service Cooperative Bank in Thrissur seemed to have cast a section of the party's State leadership in an unflattering light.
The Congress and the BJP have attempted to put former Cooperation Minister and CPI(M) State committee member A.C. Moideen, MLA, on the dock in connection with the financial crime primarily.
They accused Mr. Moideen of sharing a "cosy relationship" with the suspects in the case. Opposition politicians brandished purported pictures of Mr. Moideen attending the inauguration of a supermarket allegedly owned by a relative of an accused in the financial fraud case.
They also accused Mr. Modieen of ignoring cautionary reports from various agencies, including the CPI(M) district committee in Thrissur, about the allegedly fraudulent dealings by the bank management.
The fraud had first surfaced by some accounts when Mr. Modieen held the Cooperation portfolio in the previous LDF government. Later, Kadakampally Surendran had succeeded Mr. Moideen as Cooperation Minister.
The CPI(M) reportedly tasked CPI(M) State committee member P.K. Biju to probe the accusations initially. There were also reports that the CPI(M) in Thrissur had flagged the fraud in meetings attended by top party leaders, including party central secretariat member and Devaswom Minister K. Radhakrishnan and Baby John.
Mr. Moideen had denied the charges. However, the Congress and BJP seemed unwilling to give the CPI(M) any quarter. They demanded a CBI inquiry and accused the party of condoning the crime and profiting from it.
The CPI(M) State secretariat had reportedly taken a serious view of the matter. An insider said disciplinary action was underway against at least two "errant committees" for extending tacit support to the culprits.
The CPI(M) was also reportedly wary that copycat financial crimes could have occurred in other cooperative banks controlled by the party.
Some leaders reportedly felt the current scam would appear to justify the Centre's recent creation of a Cooperation Ministry supposedly to administer "inter-State" cooperative societies and take the sheen of the party's campaign against the Centre's alleged attacks on fiscal federalism.
