Bengaluru, 6 June

The Enforcement Directorate (ED) has seized assets worth approximately Rs 14 crore belonging to RM Manjunatha Gowda, the former chairman of a Karnataka-based cooperative bank, in connection with an alleged gold loan scam linked to money laundering. Gowda, along with his wife, is currently in judicial custody since his arrest in April, following extensive raids conducted by the agency.

The ED's action involves the attachment of both movable and immovable properties valued at Rs 13.91 crore under the Prevention of Money Laundering Act (PMLA). This investigation stems from allegations made by the Karnataka Police, indicating that B Shobha, a former branch manager of the Shimoga District Cooperative Central Bank, conspired with others to misappropriate bank funds amounting to about Rs 62.77 crore.

Authorities allege that Shobha opened fraudulent gold loan accounts sans the knowledge of the legitimate account holders, employing fake and forged documentation. The ED's findings indicate that a significant misappropriation of funds occurred at the bank's city branch, primarily orchestrated by Shobha under Gowda's instruction.

The agency contends that the “proceeds of crime” generated through this conspiracy were laundered and subsequently transferred to Gowda, who reportedly acquired various assets that are disproportionate to his known income streams, according to a chargesheet filed by the Lokayukta Police.