The Vigilance and Anti-Corruption Bureau (VACB) on Wednesday questioned Sree Narayana Dharma Paripalana (SNDP) Yoga general secretary Vellappally Natesan as part of a high court-ordered probe into the microfinance scam. The interrogation reportedly took place at his residence in Alappuzha.
The VACB charged five people, including Mr Natesan, with conspiracy and financial fraud based on a complaint filed by the late Chief Minister VS Achuthanandan in 2016 and booked them under relevant provisions of the Prevention of Corruption Act and the Indian Penal Code.
The prosecution’s case was that the suspects had fraudulently misappropriated large sums of money borrowed from banks through the Kerala State Backwards Classes Development Corporation on the pretext of providing seed money to economically challenged members of the SNDP Union, mostly women, to set up household-level businesses such as manufacturing soap, pickle, jam and incense sticks.
The prosecution alleged that Yogam officials disbursed low-interest loans to self-help groups composed mostly of women at extortionate rates, pocketing the illegal proceeds. The accused also allegedly obtained loans in their own names using fictitious identities and fake addresses.
In addition, the accused allegedly did not pay the installments of loans from self-groups in the concerned banks.
The large-scale fraud came to light when the loan recipients, an estimated 5,000 families, faced debt collection proceedings initiated by the banks, despite repaying their loans with timely mortgage payments to SNDP trade union deliverers responsible for the microfinance scheme.
The VACB case was that the suspects formed a cartel to enrich themselves financially at the expense of the state and economically disadvantaged participants in the system. It put the estimated loss to the exchequer at ₹15 crore.
Achuthanandan took up the cause of the “cheated” families and asked the then United Democratic Front government. He threatened to move the high court if the government did not register the case. As Leader of the Opposition, he repeatedly raised the issue in the Assembly, urging the government to insulate “duped” families from revenue recovery proceedings. The crime department subsequently registered the case in 2016.
The investigation stalled under the Left Democratic Front government. The government also dismissed the investigating officer P. Sasidharan. In July 2025, the High Court ordered the government to reinstate Mr. Sasidharan and expedite the filing of charges.
Former Kerala State Backwards Classes Development Corporation CEOs Najeeb and Dileep Kumar and chief microfinance coordinator KK Maheshan and SNDP union president MN Soman were also among the accused.
Mr Natesan has since maintained that he was innocent of any wrongdoing and that he was the victim of a political witch hunt by the UDF regime.
He told reporters in Alappuzha that an earlier investigation had cleared him of wrongdoing and he would prove his innocence in court and before the government.
Published – 19 Feb 2026 20:33 IST