Kochi, Feb 5 (IANS): Senior CPI-M legislator and former Kerala Cooperation Minister A.C. Moideen, who came under the Enforcement Directorate (ED) scanner in the Karuvannur Service Cooperative Bank loan scam, got a jolt on Monday when the adjudicating authority in the Union Finance Ministry rejected his challenge to the freezing and seizure of Rs 40 lakh in six bank accounts of he and his wife.

The ED, since the past eight months, has been probing the around Rs 300 crore that was siphoned off from Karuvannur Service Cooperative Bank Ltd in Trissur.

As part of the probe, the ED first raided Moideen’s house and later he had appeared before the ED at their office. When he was served another notice, he did not turn up.

The ED investigation has revealed that on the instruction of certain persons, who were district level leaders and committee members of a certain political party, loans were disbursed by the Bank Manager through the agent in cash to "non-member benamis" by mortgaging properties of not so well-off individuals without their knowledge.

It has come to light that many 'benami loans' were allegedly disbursed on the instructions of Moideen.

The fresh action against Moideen has sent shockwaves in the CPI-M as the Assembly is in session.