Kochi, June 6, 2026 — A Special PMLA court in Kochi has ruled that a prima facie case exists against the Communist Party of India (Marxist) [CPI(M)], Lok Sabha MP K Radhakrishnan, MLA A C Moideen, and several other senior party leaders in the Karuvannur Service Cooperative Bank money laundering scam, marking a significant development in the nearly five-year-old case.
Court’s Key Finding
The Special Protections of Money Laundering Act (PMLA) court examined the supplementary chargesheet filed by the Enforcement Directorate (ED) and concluded that there is sufficient evidence to proceed with trial against 29 accused, including the CPI(M) party itself as a corporate accused. The court specifically observed that key figures—MLA A C Moideen, MP K Radhakrishnan, and former Thrissur district secretary M M Varghese—must face trial for their alleged roles in the fraud.
“The Special PMLA court ruled that there is prima facie evidence against prominent CPI(M) leaders in the Karuvannur Cooperative Bank scam case,” the court stated in its order dated June 5, 2026.
Background of the Scam
The Karuvannur Service Cooperative Bank fraud, uncovered in 2021 in Thrissur district, Kerala, involves misappropriation of approximately ₹300 crore (around $36 million) through unauthorized loans, benami transactions, and money laundering operations. More than ₹263 crore remains unpaid to 30,078 depositors even as of December 2025, leaving thousands of ordinary savers waiting for recovery of their funds.
According to the ED’s investigation, the scam involved systematic disbursement of benami loans on the instructions of A C Moideen, who was then the Minister for Local Self Government and is now the MLA from Karuvannur.
Accused in the Case
The total number of accused in the case now stands at 83, including:
The ED submitted its initial chargesheet in May 2025, naming the CPI(M)’s Thrissur district committee as an accused alongside eight party leaders.
Investigation Timeline
- 2021: Scam uncovered; investigation begins by Kerala Crime Branch
- April 2025: Kerala High Court directed Crime Branch to investigate all persons named in ED’s ECIR, including CPI(M) leaders
- May 26, 2025: ED filed initial chargesheet with 83 accused
- June 5, 2026: Supplementary chargesheet filed against 29 accused including CPI(M)
- June 5, 2026: Kochi court accepts supplementary chargesheet and finds prima facie case
Kerala High Court’s Earlier Directions
The Kerala High Court has been actively monitoring the case since 2021. In April 2025, Justice K. Singh directed the Investigating Officer to investigate the role of all accused named by the ED in their ECIR, warning against shielding any political figures.
Justice P.V. Kunhikrishnan, in a July 2025 order, noted that the case had been pending since 2021 and emphasized that “the Investigating Officer will do the needful to see that the real culprits are brought before the Court of law for trial”.
A writ petition seeking a CBI probe was disposed of in July 2025, with the court directing the petitioner to approach jurisdictional courts for grievances.
Statements from Stakeholders
The ED has maintained that investigations revealed systematic money laundering through benami loans, with political leadership directing irregular disbursements. The supplementary chargesheet specifically alleges that the CPI(M) district unit facilitated the fraud.
CPI(M) Response
The CPI(M) has denied involvement, claiming the chargesheet is politically motivated. However, the court’s prima facie finding means the party must now face trial alongside its leaders.
Depositors’ Concerns
With over ₹260 crore still outstanding, depositors continue to wait for recovery. Government data indicates intensive steps are underway to recover loan arrears, with further repayments possible once amounts are realized.
Legal Significance
The court’s finding of a prima facie case is a critical procedural milestone. It means:
- Trial will proceed against all 29 accused in the supplementary chargesheet
- CPI(M) as corporate accused is rare in Indian banking fraud cases
- MP and MLA immunity does not apply in PMLA proceedings
- Burden shifts to accused to prove innocence during trial
Financial Impact
The scam has devastated thousands of small depositors in Thrissur district:
- Total misappropriated: ₹300 crore
- Unpaid to depositors: ₹263 crore
- Affected depositors: 30,078 individuals
- Recovery status: Intensive efforts ongoing for loan arrears
Next Steps
The case will now proceed to trial in the Special PMLA court, Kochi. The accused have been summoned to appear, and the court will begin examining evidence in coming weeks. Legal experts note that if convicted, the accused could face imprisonment up to seven years under PMLA provisions.
This development adds to the political complexity in Kerala, where CPI(M) heads the state government. The trial will closely watch whether the court finds conclusive evidence linking party leadership to the banking fraud.