Daijiworld Media Network - Shivamogga
Shivamogga, Apr 10: In a major breakthrough, the Enforcement Directorate (ED), Bengaluru Zonal Office, arrested R M Manjunatha Gowda, former chairman of Shivamogga District Co-operative Central (DCC) Bank, on Wednesday in connection with a multi-crore fake gold loan scam, under provisions of the Prevention of Money Laundering Act (PMLA).
According to an official release, Gowda was found to have played a central role in laundering proceeds derived from disbursing fraudulent gold loans worth over Rs 62 cr. The loans were allegedly sanctioned at the DCC Bank’s city branch using fake or non-existent gold jewellery as collateral.
Following his arrest, Gowda was presented before a special court, which has remanded him to ED custody for 14 days.
The ED revealed that the scam was orchestrated primarily by branch manager B. Shobha, acting under Gowda’s instructions. Investigations, supported by a chargesheet filed by Lokayukta Police, suggest that Shobha, in collusion with several others, misappropriated nearly Rs 62.77 cr of bank funds.
The modus operandi, officials said, involved creating fraudulent gold loan accounts without the knowledge of the purported borrowers. These accounts were backed by forged documents and fake gold, or in some instances, no gold at all.
The central agency noted that the Proceeds of Crime (POC) generated through these fraudulent transactions were laundered and routed to Gowda, who subsequently acquired several properties using the illicit funds. It was also established that he owned assets disproportionate to his known sources of income.
“Further evidence, including digital records, has been seized during search operations conducted on April 8 across various locations in Shivamogga and Bengaluru, including the DCC Bank’s city branch,” the ED added.
The fraud first came to light in July 2014, when the bank’s general manager filed a complaint, triggering an investigation by the Doddapet Police. At the time, Manjunath Gowda and six others were disqualified in 2006 over financial irregularities, though the full scale of the scam only unfolded later.
Probes revealed that between 2004 and 2014, loans worth Rs 62 cr were disbursed — of which only Rs 5.5 crore were backed by actual gold (144 cases), Rs 40.57 cr against fake gold (185 cases), and Rs 17.13 cr without any collateral.
Sources have also indicated that Manjunath Gowda is believed to be closely associated with Deputy Chief Minister D K Shivakumar, adding a political dimension to the already high-profile investigation.