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Cops seal Krushi Bank ex-chairman's house

Syed Amin Jafri in Hyderabad

The Hyderabad cops carried out searches and sealed the rented house of former chairman of Krushi Cooperative Urban Bank in Hyderabad.

A team of detective department officials raided the residence of K Venkateswara Rao in the posh Jubilee Hills in the city on Sunday evening but found no valuables or incriminating documents there. None of Rao's family members were present at the time of the raid.

Police sources said that the house was taken on rent by Rao but it was apparently abandoned by him sometime ago. Rao was paying monthly rent of Rs 60,000 to Rs 80,000.

The detective department team found household items worth Rs 15,000 in the house, including Rs 3,000 worth of kitchenware, during the raid.

Even the nine other ex-directors, including K Venugopal Rao and K Sunita (brother and sister of Venkateswara Rao), stayed in rented premises, the police said and found this to be quite intriguing. The ex-directors or their family members were not present when the police teams raided their houses in the city.

The detective department teams have also fanned out to various places in the state, including Rao's native village Venkatapragada near Gudivada in Krishna district and his wife's home village Naidupalem near Eluru town in West Godavari district.

The police sources said that Venkateswara Rao was believed to have built a palatial bungalow worth Rs 10 million at his native village.

He is stated to own this bungalow and other properties, including 70-acre farm land at his village, a 50-acre mango grove near Nuzvid and a 50-acre aquaculture pond near Bhimavaram-- all worth Rs 40 million -- in fictitious names.

He is also said to have 14 bank accounts in various banks where Rs 10 million was deposited.

The Hyderabad police commissioner Pervaram Ramulu has also cautioned the people not to buy the properties, both movable and immovable, belonging to former chairman, vice-chairman and other directors of Krushi Bank as well as their relatives and friends.

The sub-registrars of Registration department in Hyderabad city limits have also been asked not to register any of the transactions of the former directors and chairman of Krushi Bank and their relatives and friends.

The commissioner said that the former chairman and directors had swindled the deposits of Krushi Bank and invested in properties.

A criminal case has been filed against them and their properties and assets are liable for seizure under the AP Protection of Depositors of Financial Establishments Act, 1999.

Preliminary investigation by the police revealed that there were 10,912 depositors who had put in their money to the tune of Rs 316.8 million in the Krushi Bank.

On the other hand, the bank had sanctioned loans and advances to the extent of Rs 317.6 million. The bank had a cash balance of just around Rs 615,000, when it got into liquidity crisis on August 10.

The chairman had allegedly siphoned off Rs 160 million to his 37 accounts in fictitious names in the bank.

Advances granted to him and his concerns included an individual loan of Rs 3.85 million to him, Rs 517,000 and Rs five million to Halcyon Softech Limited and Rs 39 million to Goldcrest Power and Projects promoted by him.

These loans and advances were provided in violation of the directives of the RBI under section 35 (A) of Banking Regulation Act. Proper procedure was not followed by the Bank while granting loans and advances to its chairman and his concerns in which he was a director.

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