Nagpur: The Central Registrar of Cooperative Societies (CRCS) has taken a significant step by serving a show-cause notice on Pramod Manmode, Chairman, and Chief Executive Officer of Nirmal Ujjwal Credit Cooperative Society. The notice pertains to the alleged diversion of Rs 317.73 crore in public deposits to other enterprises without the necessary permissions, according to a report published in a local English daily.
According to the report, the show-cause notice asserts that a substantial portion of these diverted funds was channelled into enterprises that were experiencing financial losses. Such actions are deemed a blatant violation of the Multi-State Cooperative Societies (MSCS) Act, as stated in the notice. Furthermore, the diversion of funds runs counter to prudent banking principles.
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The Nagpur city police have already registered multiple offenses against Pramod Manmode. These offenses include allegations of financial irregularities and violations of the provisions of the MSCS Act. The notice underscores that the society has been accepting investments and deposits from individuals who are not members, which is a violation of Section 68 of the MSCS Act.
The report further claimed that the society has raised funds exceeding ten times its share capital and reserves, even as it has accumulated losses. This practice is deemed a violation of Section 67 of the MSCS Act. The notice also highlights that the society has reportedly portrayed income through Non-Performing Assets (NPA) as profit, contravening standard and prudent auditing principles set forth by the Institute of Chartered Accountants of India.
During the investigation into offenses involving the founder, Pramod Manmode, it has come to light that the society allegedly engaged in misappropriation of funds to “compensate the frauds” committed by Manmode’s daughter, who serves as the President of the Society, as mentioned in the notice, the report claimed.
The society has failed to furnish its online annual returns for the financial year 2021-22, and incomplete annual returns for the year 2020-21 to the CRCS. This non-compliance is mandatory under the MSCS Act.
The show-cause notice indicates serious allegations of financial misconduct and regulatory violations by Nirmal Ujjwal Credit Cooperative Society and its leadership. The CRCS’s actions underscore its commitment to upholding financial integrity and adherence to cooperative society laws.
