Madhavpura bank MD Pandya arrested

Our Bureau

Ahmedabad, April 26 : Absconding chief executive officer (CEO) and managing director of the beleaguerd Madhavpura Mercantile Cooperative Bank (MMCB) Devendra Pandya, was finally arrested by a team of the economic offence cell of the state criminal investigation department from his residence in Ahmedabad.

After his arrest the CEO was immediately rushed to the camp office of the economic offence cell where investigative officials interrogated him in spells for his involvement in the Rs 1,030-crore MMCB scam. The arrest came following a criminal case registered against Mr Pandya, bank chairman Ramesh Parikh and manager of the bank’s Mandhvi branch in Mumbai, Jagdish Pandya, by the Madhupura police on Saturday.
Mr Devendra Pandya has been working as the CEO of MMCB since 1988 though he has connections with the other accused since more than the last 30 years.

"Pandya has been arrested under provisions of the Banking Regulations Act, 1949, Reserve Bank of India (RBI) Act, 1934 and also under Sections 406, 408, 409, 420 and 120B of the Indian Penal Code for cheating, forgery, breach of trust and also for hatching criminal conspiracy in connivance with the two other accused," home minister Haren Pandya told reporters here. "Not only that, Pandya also has diverted Rs 135 crore from the bank’s deposit to various companies owned by Ketan Parekh and for all these activities we are going to award him an exemplary punishment,’’ the minister added.

"We are also in the process of arresting Ramesh Parikh as he is already released on bail from a Mumbai Court on April 12, and his arrest would be made at the earliest," superintendent of police (SP), Bhati told The Financial Express on Thursday. Regarding the fate of Mr Jagdish Pandya, the SP however, ruled out possibilities of his immediate arrest as he is still in judicial custody in Maharashtra following his arrest by the Central Bureau of Investigation (CBI), Mumbai branch.

It may be recalled that on March 13, on the basis of an RBI guideline, Central Registrar of Co-Operatives suspended the bank authorities. Since March 15, S Ramachandran was appointed administrator of MMCB. Meanwhile, RBI lodged a complaint with the chief metropolitan magistrate’s court (CMM) on March 14, naming Mr Ramesh Parikh and Mr Pandya as accused under Section 46 of Banking Regulations Act, 1949, and also under Section 58 of the RBI Act, 1934, for violating the apex bank’s guidelines in a number of illegal ways. The complaint was lodged after the RBI made a thorough inspection and detected number of irregularities in the MMCB.

"Pandya on his capacity as CEO of the bank has provided huge loans to various organisations and most of the organisations are owned by Ramesh Parikh, chairman of the bank. Doing all these illegal practices, Pandya violated RBI guidelines for regulating transactions of the bank which are issued to safeguard interest of the depositors," Mr Bhati said.

As MMCB is the second largest scheduled bank in the state, the accused have also sought deposits from other banks, thus cheating depositors of those banks too. "In this way, they caused financial losses for 17 other banks in more than one year as we have found they started all these practices on October, 200," the SP added.