In a surprise move, the Vigilance conducted raids in various branches of the Kerala government’s chit fund institution KSFE (Kerala State Financial Enterprise) on Friday. The search operation was performed under the code name ‘Bachat’. The search operation was carried out following complaints that widespread irregularities are happening in the financial institute with the respective branch managers’ knowledge.
Reportedly, the Vigilance discovered that the chit fund firm’s funds have been misappropriated with branch managers’ approval to launder black money. Moreover, reports claim that the officials have observed that managers join KSFE’s massive chit schemes under a pseudo name and pay chit using KSFE’s funds when there are no takers for that scheme. Besides, the Vigilance has also found flaws in the gold loan programmes from four KSFE branches. They noticed that the gold kept as security was not handled safely. Moreover, irregularities have also been found in the depositing (or lack thereof) of the chits in bank accounts or treasury.
Following the raid, Kerala Finance Minister Thomas Isaac has stressed that the Vigilance’s findings after raids are baseless. He added that he has no fear over the raid. He said, “The law was not made by Vigilance. The state has a legal department of its own to interpret the existing laws. KSFE has invested the money collected via Pravasi chit funds in KIIFB with prior approval of the legal department.”
This has led the Finance Minister to lock horns with the Home Ministry, as Thomas asked whose decision it was. However, the authorities at the Home Ministry had explained that the Vigilance doesn’t need to plan their moves with them, especially when they are progressing based on relevant information. The situation is extremely important considering the timing of the raid. Recently, Thomas had a bout with the CAG over the latter’s report that the KIIFB had “unconstitutionally” raised money using masala bond. With the Vigilance’s raid on KSFE, the political consequences are far-reaching, especially since the local body polls are underway.
Meanwhile, KSFE chairman Peelipose Thomas said that KSFE was above board as well as transparent in its functioning. He added that the institution has its internal audits as well as those conducted by CAG. He also welcomed any investigation, clarifying that KSFE would correct any problems if any are found, and added that the institution is not a “haven for black money”. Opposition Leader Ramesh Chennithala noted that Thomas Isaac is angry because the raid would expose embarrassing financial fraud.