The Economic Offences Wing in Tamil Nadu’s Dindigul district has arrested Shanmugavelu, the former secretary of the V. Ammapatti Primary Agricultural Cooperative Credit Society in Vedasandur, for his alleged involvement in a financial fraud exceeding ₹3 crore. An audit of the society’s financial transactions and loan records brought the irregularities to light, revealing that Shanmugavelu allegedly misused his position to sanction loans worth lakhs of rupees to his wife, son, daughter, and other relatives by bypassing prescribed procedures.
Diversion of Crop Loan Waiver Funds
The inquiry further revealed that Shanmugavelu allegedly manipulated the crop loan waiver scheme for personal enrichment. Investigators found that he created records and sanctioned loans using the names of local farmers without their knowledge or consent, subsequently diverting the benefits. The fraudulent paper trail was uncovered during a departmental scrutiny of the cooperative credit society’s financial accounts, confirming that funds intended for agricultural relief had been systematically siphoned off.
Intimidation and Destruction of Records
As the probe intensified, Shanmugavelu and his relative, identified as Paulraj, reportedly attempted to derail the proceedings. The two men allegedly tried to intimidate the woman inquiry officer assigned to investigate the financial misappropriation. In an effort to shield themselves from legal scrutiny, they also attempted to seize official society documents to obstruct the inquiry. Following this encounter, the officer submitted a preliminary inquiry report detailing the fraud and lodged a formal complaint regarding the obstruction.
Regulatory Action and Widening Probe
Acting on the findings, the Deputy Registrar of Cooperative Societies of Palani Circle filed a formal complaint with the Economic Offences Wing. The agency examined the society’s transaction history and preliminary findings before arresting Shanmugavelu. Investigators are now reviewing ledger entries and application files to determine the total number of fake beneficiary profiles created, verify whether established lending protocols were breached for family loans, and quantify the complete loss suffered by the cooperative society. Officials noted that additional individuals could face action as the financial trail is scrutinized.
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