New India Coop Bank embezzlement: Arrested official says gave money to builder for SRA project

The New India Cooperative Bank official arrested for allegedly embezzling Rs 122 crore has admitted to giving Rs 70 crore to a real estate developer to complete an SRA project in Charkop in Kandivali, a police official said on Monday.

The cooperative bank's general manager and head of accounts Hitesh Mehta and real estate developer Dharmesh Paun have been arrested in the case and a court has remanded them in police custody till February 1. The case was registered on the complaint of Devarshi Ghosh, the bank's acting chief executive officer, at Dadar police station on Friday.

The probe was transferred to the Economic Offences Wing of Mumbai police.


It arrested Mehta for alleged embezzlement of Rs 122 crore from the bank's Prabhadevi and Goregaon branches.

"Paun was held on Sunday. After registration of the case, Mumbai police issued lookout circulars (LOC) against Mehta and one Unnathan Arunachalam alias Arun Bhai (55), who is in the business of solar panels. Mehta has told us he gave Rs 70 crore to the real estate developer and Rs 40 crore to Arunachalam," the official said.

"Some of the money was used by Mehta for personal purposes. Paun has so far not admitted to taking the whole amount from Mehta. We are yet to find out if Paun had applied for a bank loan to complete the SRA project. The embezzlement of the funds came to light when RBI officials inspected the bank's corporate office in Prabhadevi," he said.

As there was a shortage of funds in the safe, RBI officials held a meeting with bank employees, during which Mehta said he was the custodian of the funds and would return the money, as per police.

"We are also probing why an audit could not find out that the embezzlement was going on for the last five years," the official informed.