Daijiworld Media Network - Mangaluru (SP)

Mangaluru, Nov 29: Five persons including the manager of Indian Overseas Bank (IOB) Kulai branch stand arrested by the police personnel of Suratkal police station relating to embezzlement of fixed deposit standing in the name of Karnataka Rural Infrastructure Development Ltd (KRIDL) for personal use illegally.

Manager of IOB's regional office here, Serin Madhusudan, Sijo, Sunil, Jerry and Salaam have been arrested. All of them have been remanded to judicial custody.

Relating to this diversion of funds, three officials of KRIDL had been suspended and probe into their role in this fraud had been undertaken. The police investigation has concluded that funds were misused with the connivance of bank officials. As soon as a complaint was filed in Suratkal polie station about this wrongdoing, manager of the bank had absconded.

Police inspector of Suratkal station, Cheluvaraj, who conducted investigation and went through various records, found that two fixed deposits, the first one for Rs 20 crore and the second, Rs 35 crore, had been made in Kulai branch of IOB on August 24 and 30 respectively. This fund was embezzled later by transferring certain amounts to various accounts, some of which are suspected to be fictitious. After Rs 50 lac was transferred to the dormant account of Shah Export in Vijaya Bank's Koramangala Branch, Bengaluru, the officials of Vijaya Bank got suspicion and they sought to confirm the transaction. The illegal activity came out then. It later transpired that fake current account was created, the deposit was transferred to that account, from which it was further channelized to different accounts.

A six-member team of KRIDL comprising top officials of the entity investigated the case. During the visit of this team to IOB Kulai branch on October 21, the manager gave confusing statements, which gave rise to doubts. The bank was asked to immediately refund the entire deposit amount along with interest thereon. When the officials contacted the branch again on October 24, the manager was found to have proceeded on leave citing poor health. This confirmed the worst suspicion of the officials. On October 30, they filed complaint in Suratkal police station about illegal transfer of KRIDL funds through forgery and named manager, Serin Madhusudan, and some officials of the regional office.

It is gathered that IOB had bagged the said deposits on the basis of highest bid of 5.75 percent per annum interest offered by it for the said deposit.