The Enforcement Directorate (ED) has arrested R.M. Manjunatha Gowda, former Chairman of the Shivamogga District Co-operative Central (DCC) Bank, in connection with a Rs62.77 crore gold loan scam. The arrest was made by the Bengaluru Zonal Office under the Prevention of Money Laundering Act (PMLA) on Wednesday.
According to the ED’s official statement, Gowda was found involved in laundering proceeds generated through fraudulent loans sanctioned against fake or non-existent gold collateral at the Shivamogga DCC Bank. He was produced before a Special Court and remanded to ED custody for 14 days.
The ED investigation revealed that the scam was executed by branch manager B. Shobha under Gowda’s directives. Fake loan accounts were opened using forged documents, often without the knowledge of the supposed account holders. The fraud spanned from 2004 to 2014 and involved three types of transactions:
Rs5.5 crore loans against real gold (144 cases)
Rs40.57 crore loans against fake gold (185 cases)
Rs17.13 crore loans without any collateral
ED noted that the proceeds of this scam were used to acquire various assets, both movable and immovable, in Gowda’s name. These properties are now under scrutiny as they are considered to be purchased with laundered funds.
The central agency also cited findings by the Lokayuktha Police, which earlier charged B. Shobha and others for orchestrating large-scale financial misappropriations. Gowda had already been disqualified from his administrative role in 2006 due to financial irregularities.
The scandal was first unearthed in 2014 when the bank’s general manager lodged a complaint, leading to an initial arrest of Gowda by the Doddapet Police. Recent searches by ED on April 8 at multiple locations, including the DCC Bank’s city branch, yielded digital evidence.
Sources have also alleged political connections, stating that Manjunatha Gowda is a close aide of Karnataka Deputy Chief Minister D.K. Shivakumar. ED has not commented on the political angle, but investigations are ongoing.
