J & K Scraps Cooperative Elections After Scam Links Surface

Srinagar- The Jammu and Kashmir administration canceled elections for several cooperative societies after investigators uncovered attempts to manipulate the process through fake entities linked to a high-profile financial scandal.

The decision comes amid one of the region's largest-ever fraud cases, involving the alleged siphoning of ₹223 crore from the Jammu and Kashmir State Cooperative Bank.

Authorities said proxy candidates and bogus societies were allegedly created by former JKSTCB Chairman Mohammad Shafi Dar and his associates to tighten their grip over the cooperative sector.

Zubair Ahmed, the Sub-Divisional Magistrate (East), took the unprecedented step of scrapping the elections, citing serious concerns over transparency and potential misuse of the cooperative structure.

Dar rose through the ranks of the cooperative sector, starting as a low-level employee and eventually reaching the top post of JKSTCB. He is now accused of masterminding the fraudulent disbursement of ₹223 crore from a sanctioned loan of ₹250 crore in 2019.

The loan was supposedly granted to the River Jhelum Cooperative House Building Society, which investigators later identified as entirely fictitious.

Banking norms and regulatory checks were bypassed as the loan was pushed through, officials said.

The Anti-Corruption Bureau (ACB) registered a case and filed a chargesheet, while the Enforcement Directorate (ED) began a parallel probe into money laundering under the Prevention of Money Laundering Act (PMLA).

Investigators uncovered seven fake cooperative societies established by Dar and his network, including the Lakeview Cooperative Society, Kashmir Valley Cooperative Society, and Budgam Builder Cooperative Society. The government swiftly banned these entities once their fraudulent character became clear.

In a series of enforcement actions, the ED attached assets worth more than ₹195 crore linked to Dar and his associates. Dar, along with his aide Hilal Ahmad Mir, was arrested in December 2023. Both remain in custody after bail pleas were rejected.

Nazir Mir, a local businessman, welcomed the administration's decision.“This was a necessary step to safeguard the credibility of the cooperative sector,” he said.

Mir pointed out how public funds were misappropriated through bogus societies and warned that holding the elections could have legitimized those networks. He called for stricter oversight and structural reforms to prevent future hijacking of cooperative institutions.

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