The Kerala NGO scam has linked several influential figures, including a retired High Court judge and the executive director of a renowned NGO. The fraudulent scheme revolved around the National NGO Confederation, an organisation established by 26-year-old Ananthu Krishna from Kerala, who lured people with promises of scooters, laptops, and home appliances at half their actual price.
Kerala NGO Scam: The Beginning
Ananthu Krishna managed to deceive thousands of individuals across Kerala, collecting several crores of rupees before law enforcement authorities apprehended him. His organisation, the National NGO Confederation, was formed in 2022 by bringing together approximately 170 local NGOs.
The premise of the scheme was that the confederation would collect Corporate Social Responsibility (CSR) funds from businesses, which would subsidise half the cost of the products offered to buyers. However, the police estimate that Ananthu Krishna defrauded the public of more than ₹20 crore.
How Did the Kerala NGO Scam Scheme Work?
The confederation promoted attractive offers, such as scooters worth ₹1.20 lakh being sold for ₹60,000 and laptops priced at ₹60,000 being available for just ₹30,000. Similar discounts were promised on home appliances.
Reports suggest that Ananthu and his team persuaded people that the remaining cost of the products would be covered by CSR funds collected from corporate donations.
Applicants were required to pay half the cost of their chosen product along with a registration fee of ₹500. To make the scheme appear legitimate, some initial applicants did receive scooters and laptops at the advertised prices, which helped build credibility and attracted more participants.
How Did the Fraud Unravel?
After making payments, many applicants found that their scooters and other items never arrived. The organisers repeatedly delayed deliveries and asked for additional payments, claiming that further funding was needed. They assured buyers that if they paid again, their goods would be delivered within three months.
However, when the promised products failed to materialise, customers began protesting. In response, the confederation arranged meetings to pacify the complainants, promising delivery within 100 days. To further assure them, they even signed contracts on stamped paper. Shockingly, they charged an additional ₹200 for the seal fee and ₹500 for notarisation, further exploiting the victims.
Kerala NGO Scam and Kudumbashree’s Involvement
Voluntary organisations sought assistance from Kudumbashree, Kerala’s largest women’s empowerment organisation, to find beneficiaries for the two-wheeler distribution program of the National NGO Confederation. The plan aimed to encourage more women to join the initiative through Community Development Societies (CDS) offices.
Three months ago, however, the State Mission Office had issued a cautionary notice to all district and lower-level offices, instructing them to avoid any association with private voluntary organisations. The directive warned of potential disciplinary action if employees were found engaging with such organisations.
Despite this warning, some grassroots-level employees still facilitated connections between the fraudsters and potential beneficiaries. This involvement came to light when complaints reached the police. Many applicants, trusting Kudumbashree’s reputation, applied for the two-wheelers, unaware that they were being scammed.
The Arrest and Growing Complaints
Following numerous complaints, the Ernakulam Rural Police arrested Ananthu Krishna. After his arrest, police stations across Kerala, especially in the northern regions, were inundated with similar complaints, many of them from women.
Legal Troubles and Political Connections
Ananthu Krishna had been promising discounted scooters, home appliances, and electronics with the alleged backing of CSR funds since 2022. A senior police officer from Muvattupuzha revealed that Krishna already faced multiple charges of cheating and criminal breach of trust in the Muvattupuzha and Idukki districts.
The latest case against him and six others, including Congress leader Lali Vincent from Kannur, emerged from over 400 complaints filed regarding transactions with the NGO Sardar Patel Institute of Advanced Research and Developmental Studies (SPIARDS), where Vincent served as a legal advisor.
Political Defense
While speaking to the press in Kochi, Vincent defended Krishna, stating that he was incapable of committing such fraud. ‘He is like a son to me,’ she claimed. She further argued that Krishna was a scapegoat and blamed those who had initially promised CSR funds but later withdrew their support. She admitted that Krishna had distributed scooters, sewing machines, and appliances to some families.
As a legal advisor and lawyer for SPIARDS and Krishna, Vincent claimed she had drafted agreements for the organisation and was paid legal fees for her work. However, police investigations found no evidence of promised scooters being delivered, contradicting Vincent’s claims.
Victims Demand Action
Hundreds of women associated with the Seed Society approached the Kannur police, accusing their secretary of deception and demanding legal action. Several victims shared their experiences on a TV channel, stating that they had invested money after seeing acquaintances receive discounted laptops, sewing machines, water tanks, water purifiers, and food kits.
The Modus Operandi
A senior police officer detailed Krishna’s operations, explaining that he had established an organisation called the ‘Muvattupuzha Socio-Economic Development Society’ and convinced members to deposit money in a consultancy he had set up. He promised half-priced two-wheelers through this setup.
He reportedly created multiple consultancies in his own name and carried out financial transactions through them. Krishna falsely claimed to be the national coordinator of the National NGO Federation, asserting that he had been entrusted with managing CSR funds from various corporations across India.
Investigators discovered that around ₹9 crore had been siphoned from Muvattupuzha alone using this fraudulent scheme. Additionally, Krishna had set up similar societies across different blocks in Kerala and amassed funds through 62 ‘seed societies.’
Expanding Investigations
According to the cases registered in Muvattupuzha and Idukki, Krishna and his associates defrauded people of more than ₹20 crore. However, officials believe that the actual amount could be much higher as more complaints continue to emerge.
Authorities are also probing the involvement of political figures in the scam. Many businesses were unaware that Krishna was misusing the concept of CSR funds to defraud the public. During questioning, Krishna reportedly admitted that he had not received any CSR funds from any company. The police continue their investigations, and as more victims come forward, the full extent of the fraud is gradually being uncovered.
Conclusion
This shocking fraud highlights the dangers of unchecked trust in too-good-to-be-true schemes. Victims were misled by false promises of CSR-funded discounts, leading to widespread losses. As investigations continue, the case serves as a cautionary tale, emphasising the need for vigilance, stricter regulations, and accountability in NGO operations to prevent future scams of this magnitude. Avoid such scams and stay updated, if required consult a legal expert today. Talk to a lawyer from Vakilsearch now.
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