MUMBAI, May 25 -- Established in 2006 to provide smooth banking services to Maharashtra's Marathwada region, the Dnyanradha Multistate Cooperative Credit Society Ltd (DMCSL) prided itself on being the "first multi-state" credit society in the region. By early 2024, its slew of lucrative savings and loan schemes had lured a pool of around 600,000 investors and depositors, deposits worth Rs.2,947 crore, and 51 branches across Maharashtra and the rest of the country. Despite this seemingly impressive profile, the bubble soon burst. From May to July 2024, multiple DMCSL depositors, mostly small-time investors and farmers, approached the police in Beed, Jalna, Aurangabad and other districts with complaints of being defrauded. Amid allegations of financial misconduct and embezzlement amounting to Rs.2,467 crore against its then management, in November 2024, the Central Registrar of Cooperative Societies appointed the then deputy district registrar of cooperative societies, Beed, to shut down DMCSL. The Enforcement Directorate (ED)'s money-laundering probe, based on 38 FIRs, found that over 400,000 investors were lured into depositing money with DMCSL on the promise of returns of between 12% and 14% per month but no payments or only partial payments were subsequently made to them. The FIRs had stated that DMCSL's then founder-chairman Suresh Kute, his wife Archana Kute who was the group's non-executive director, vice-chairman Yashwant Kulkarni, general manager Narayan Shinde, executive officer Shriram Hadule and deputy executive officer Appasaheb Amte and others had encouraged the complainants to invest in DMCSL's FDs. Based on the 38 FIRs, the ED's Mumbai zonal unit registered an ECIR (Enforcement Case Information Report) in August 2024 and launched a money-laundering probe, which revealed that the then office-bearers had embezzled Rs.2,467 crore of investors' money from the credit society. This amount was diverted as purported 'loans' to the Kute group of companies, owned and controlled by Suresh and Archana Kute. As per the ED, the decision-making process for sanctioning loans and financial approvals was controlled by Kute and Kulkarni. The probe also revealed that Kute dominated the board of directors of the credit society, which had branches in Marathwada and Madhya Pradesh, and the other directors were his close associates such as his wife and Kulkarni. The group had 22 companies, four limited liability partnerships and two proprietorship firms, which were beneficially owned and controlled by Kute and his wife. The agency submitted a chargesheet against 24 accused, including Kute and 23 associated corporate entities, in a Mumbai special court in March 2025. The ED had earlier arrested Kute on January 7, while Archana was arrested in March this year. Both are in judicial custody. The ED probe found that DMSCL held deposits worth Rs.2,947 crore, and by December 12, 2024, it had extended loans of Rs.3,696 crore to multiple individuals and entities. Upon analysing the loan register, ED officials found that of the total outstanding term loans worth Rs.3,558.22 crore, an overwhelming Rs 3,545.05 crore had been advanced to the Kute group, that too without following proper documentation such as collateral and end-use certificates or adhering to procedures. "Moreover, the loans were never reported in any income-tax returns or other statutory filings," an ED official told Hindustan Times. The agency in its charge sheet said: "The ED's probe under the provisions of the PMLA (Prevention of Money Laundering Act) established that Kute allegedly hatched a criminal conspiracy, in connivance with other members/officials of the society (DMSCL) and others to illegally and fraudulently divert funds amounting to Rs.2,467 crore in the guise of loans to various companies of the Kute Group." The funds were disbursed in the accounts of companies of the Kute Group maintained with the Jalna Road, Beed branch of the credit society. The probe also revealed that upon the disbursement of these fraudulent loan amounts, the entire sum was allegedly further siphoned off by the conspirators through several Kute group accounts or directly in the form of cash. None of the funds were used for their stated purposes and were allegedly utilised for personal benefit including lifestyle expenses, investment in new businesses, purchase of properties, or personal expenses. "They were diverted and misappropriated by the involved parties, indicating a clear case of financial misconduct and embezzlement," the ED official said. The ED has so far attached or frozen assets worth Rs.1,627.86 crore. On April 21, it took over six properties worth Rs.9.29 crore-the action, carried out in Mumbai, Navi Mumbai and Pune, was aimed at securing assets identified as proceeds of crime under the PMLA. The assets include residential flats, commercial office spaces and plots held in the names of Kute, Archana and their associates....