DEHRADUN: When the offices of a little-known cooperative abruptly shut their doors last summer, thousands of depositors across Uttarakhand were left staring at locked gates, unanswered phone calls and savings that seemed to have vanished overnight. What followed has grown into one of the state’s largest cooperative banking scandals, drawing in the Central Bureau of Investigation and prompting the government to build a digital registry of loss.
A Cooperative’s Sudden Collapse
The Loni Urban Multi-State Credit & Thrift Co-operative Society, known locally as LUCC, had operated quietly through 35 branches across Uttarakhand, collecting deposits through a dense network of agents. Many of its customers came from rural and semi-urban areas, drawn by promises of attractive returns on fixed and recurring deposits.
That model unraveled in June 2024, when all LUCC offices shut down without notice. Depositors arriving to make routine withdrawals or renew deposits found empty premises. An initial complaint was filed that month by Tripti Negi at the Kotdwar police station, setting off a chain of inquiries as similar accounts began to surface from across the state.
Within weeks, complaints multiplied. Police records show that 18 first information reports were eventually registered across six districts, including Dehradun and Haridwar. More than a dozen officials and agents linked to the society were arrested as investigators began tracing cash flows and recruitment practices.
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Investors, Documents and Alleged Deception
As investigators pieced together individual complaints, a pattern of alleged inducement emerged. Film actor Aayush Shah told authorities that he and his sister, Mausam Shah, were persuaded to invest ₹4.44 crore after being shown what he described as forged property documents, bank statements and falsified income-tax returns.
According to Shah, these materials were presented as proof of the society’s financial strength and legitimacy. His account mirrored statements from other depositors, who said agents cultivated trust over time, often using documents and testimonials that appeared official but were later questioned by investigators.
Police sources say the scale of the alleged fraud soon appeared to extend well beyond isolated cases. LUCC management is accused of cheating investors of nearly ₹800 crore, a figure that reflects cumulative deposits rather than confirmed losses. Many of the accused named in early complaints failed to appear before investigators and were later described as absconding, prompting victims to approach courts seeking non-bailable arrest warrants.
From State Police to a Federal Probe
The investigation was initially handled by the state Crime Investigation Department. But the widening scope of the case soon reached the Uttarakhand High Court through public interest litigation filed by Ashutosh Negi, later merged with a petition by Vishal Chhetri.
In July, the court directed that the probe be transferred to the Central Bureau of Investigation. On November 27, the agency registered a consolidated FIR, subsuming 17 earlier cases into a single federal investigation. The move was intended to streamline the inquiry and allow investigators to examine the cooperative’s operations across district and institutional boundaries.
CBI officials have since indicated that the inquiry has revealed alleged activities beyond cooperative banking. Shah told investigators that the primary accused, Shabab Hussain, also known as Shabab Hashim, along with partners Bishwajit Badal Ghosh and Piyalee Shyamlendu Chatterjee, orchestrated what he described as a parallel fraud through another entity, Myfledge Private Limited. Authorities are examining whether funds or investors were shifted between the two structures.
A Digital Ledger of Loss
As the investigation broadened, the Uttarakhand government announced a step aimed at consolidating the human scale of the crisis. Following a formal request from the CBI on January 14, the state said it would launch an integrated online portal to allow victims to submit complaints and documentation.
Secretary Dilip Jawalkar directed the State Cooperation Department to immediately begin developing the platform. Officials say the portal is intended to help investigators assess total financial liability and identify all affected investors across the state, a task complicated by the cooperative’s reliance on hundreds of agents and paper-based records.
The government estimates that more than 1.5 lakh investors may have been affected, many of them small savers who entrusted modest sums to local agents. For investigators, the portal is expected to function as a centralized ledger, mapping deposits, promised returns and alleged losses while the criminal inquiry continues.
For depositors, it offers a formal channel in a process that has so far been defined by uncertainty: a cooperative that vanished overnight, an investigation that escalated from local police stations to a federal agency, and savings whose recovery remains tied to a slow, document-heavy accounting of what was taken and how.
