The Nagpur District Central Cooperative Bank (NDCCB), which was hit by one of the biggest scams of the cooperative sector during 2002, may soon get a democratically elected board of directors, over a decade after the earlier board was sacked. The NDCCB polls, scheduled to be held on June 19, would also provide a chance of re-election to the directors sacked after a Rs 150 crore bungle was reported in the bank.
At that time, the board had been headed by Congress MLA Sunil Kedar, who is one of the prime accused in the alleged scam. The last elections to the board were held in 1998, but the cooperation department dissolved the board of directors in 2002 and an administrator was put at the helm.
The earlier directors had been banned from holding any post in the cooperative sector for a period of six years. So, even these directors can now contest the polls. The last date for filing nominations is Monday, May 16, 2010, and officials involved in the process say so far none of the old directors have filed their nominations. Some 80 nominations have been filed so far.
Kedar said he had not yet decided on whether to stand for election, and would consult his supporters since he had a day's time to decide.
The election are being held following a directive by the high court after a petition was filed that the elections have been delayed inordinately, said a source in the cooperation department.
However, even as the elections are being held after a gap of 13 years, the procedure for fixing the financial liability of the then directors for the loss incurred due to the scam has not been completed yet. The proceedings continued for so long that the officer-in-charge Yeshwant Bagde was transferred to Amravati for five years in between, and is now back at Nagpur.
The proceedings were delayed since the directors filed several writs, raising objections at various stages to hold up the process. Bagde, however, said that the final order is now expected to be delivered within three months and all the legal hurdles have been cleared.
Section 88 of the Maharashtra State Cooperative Societies Act provides initiating of such action. During such proceedings, the financial responsibility of the directors is quantified and the amount is then recovered from their personal assets.
The scam at NDCCB was peculiar in that over Rs 100 crore was invested in government securities, which were never delivered. The securities had been purchased through a Mumbai-based broking firm, Home Trade Securities headed by Sanjay Agrawal, an accused in this scam.
Investing in government securities is part of normal banking business, and rather a safe means of parking funds. However, Home Trade took the money and did not deliver the securities. It is suspected that they were never purchased. In the meantime, NDCCB also traded in the government papers and booked profits, without actually possessing them.
Kedar has been held responsible for allowing the investment in violation of norms. The securities had to be kept in dematised format, but the banks directors allowed physical trading in the government papers. The scam was revealed during an audit and the amount of loss was pegged at Rs 150 crore, considering the interest on the money.
At that time, the board had been headed by Congress MLA Sunil Kedar, who is one of the prime accused in the alleged scam. The last elections to the board were held in 1998, but the cooperation department dissolved the board of directors in 2002 and an administrator was put at the helm.
The earlier directors had been banned from holding any post in the cooperative sector for a period of six years. So, even these directors can now contest the polls. The last date for filing nominations is Monday, May 16, 2010, and officials involved in the process say so far none of the old directors have filed their nominations. Some 80 nominations have been filed so far.
Kedar said he had not yet decided on whether to stand for election, and would consult his supporters since he had a day's time to decide.
The election are being held following a directive by the high court after a petition was filed that the elections have been delayed inordinately, said a source in the cooperation department.
However, even as the elections are being held after a gap of 13 years, the procedure for fixing the financial liability of the then directors for the loss incurred due to the scam has not been completed yet. The proceedings continued for so long that the officer-in-charge Yeshwant Bagde was transferred to Amravati for five years in between, and is now back at Nagpur.
The proceedings were delayed since the directors filed several writs, raising objections at various stages to hold up the process. Bagde, however, said that the final order is now expected to be delivered within three months and all the legal hurdles have been cleared.
Section 88 of the Maharashtra State Cooperative Societies Act provides initiating of such action. During such proceedings, the financial responsibility of the directors is quantified and the amount is then recovered from their personal assets.
The scam at NDCCB was peculiar in that over Rs 100 crore was invested in government securities, which were never delivered. The securities had been purchased through a Mumbai-based broking firm, Home Trade Securities headed by Sanjay Agrawal, an accused in this scam.
Investing in government securities is part of normal banking business, and rather a safe means of parking funds. However, Home Trade took the money and did not deliver the securities. It is suspected that they were never purchased. In the meantime, NDCCB also traded in the government papers and booked profits, without actually possessing them.
Kedar has been held responsible for allowing the investment in violation of norms. The securities had to be kept in dematised format, but the banks directors allowed physical trading in the government papers. The scam was revealed during an audit and the amount of loss was pegged at Rs 150 crore, considering the interest on the money.
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