BENGALURU — The Cubbon Park police have registered a case following allegations of a ₹70-crore scam at the Employees’ Provident Fund Organisation (EPFO) Staff Cooperative Society, involving multiple senior officials and former executives.
The complaint was lodged by C.J. Muralidhar, the society’s current president and section supervisor, who uncovered severe discrepancies in the society’s financial records after assuming charge in February. The society, tasked with extending loans to EPFO employees and accepting fixed deposits from retired staff, had stopped crediting interest payments to depositors’ accounts for three months — a red flag that led to further scrutiny.
“Over 300 employees and retirees had entrusted their life savings to the society, expecting 9% annual interest,” Muralidhar stated in his complaint. “But when depositors sought withdrawals, they were told there were no funds left in the accounts.”
Missing Funds and Years of Mismanagement
Preliminary verification revealed that the cooperative society received around ₹70 crore in deposits, but only ₹3.5 crore was officially disbursed as loans. The rest, investigators believe, may have been siphoned off over several years through falsified records and unauthorized transfers.
Among those named in the complaint are current CEO G. Gopinath, former CEOs Lingappa Gowda and Prabhakar, former accountant B.L. Jagadish, and former presidents Vijendra Rao and Jayashankar. The alleged fraud, according to the complaint, dates back as far as 2009, spanning multiple administrations and audit cycles.
The accused are suspected of manipulating ledgers, forging deposit entries, and diverting funds intended for employee loans and fixed deposits. “What began as a system for staff welfare appears to have turned into a private cash chest,” said a police source familiar with the investigation.
A Breach of Trust Within a Social Security Institution
The EPFO cooperative society, though separate from the national provident fund body, is composed largely of employees who contribute and borrow within the internal network. Such societies are meant to encourage thrift and mutual aid among staff, making this alleged betrayal particularly damaging.
Many depositors — retired officers and long-serving staff — are now uncertain about the fate of their savings. Some had invested their entire retirement benefits, believing the society’s link with EPFO guaranteed safety. “It’s devastating,” said one depositor. “We trusted our own people — the very officers who managed our accounts.”
The case underscores systemic weaknesses in the governance of employee-run cooperatives, which often operate with limited external audit oversight despite handling large volumes of funds.
Investigation Underway, Accountability in Question
The Cubbon Park Police have registered the case and begun examining account ledgers, bank statements, and board meeting records. Investigators are also probing whether external auditors or EPFO supervisory authorities ignored warning signs.
While the accused have yet to be formally charged under the Bharatiya Nyaya Sanhita (BNS) and Prevention of Corruption Act provisions, officials say the paper trail points to deliberate financial misconduct.
“The scale of diversion suggests long-term collusion,” said an officer involved in the probe. “We are mapping transactions and identifying where the deposits were ultimately routed.”
As the investigation deepens, the scandal has sparked outrage among employees and retirees — and renewed calls for stricter financial scrutiny of cooperative societies linked to public institutions. For hundreds of EPFO staff and pensioners, the question now is not just about missing money, but about the trust that may be impossible to restore.
