Bhubaneswar, June 1: The Economic Offences Wing of the state crime branch today arrested 13 people, including former president of Dhenkanal Co-operative Bank Sukant Mishra and secretary Niranjan Kar, on charges of fraud of Rs 11.82 crore.

The other arrested are two members of the bank's loan sub-committee and nine persons who had taken loans, but have not repaid them till date.

The arrests were made after Mishra and Kar were interrogated.

"During investigation, it was revealed that the accused had hatched a criminal conspiracy and granted loans to several persons through forged documents. In some cases, loans were granted without security. The bank authorities had also granted loans to their family members and relatives," said special DG, crime branch, B.K. Sharma.

The state government had asked the investigating agency to conduct a probe after financial irregularities were detected.

The bank, located on Jagannath Road in Dhenkanal, was closed in 2008. In February 2010, it was liquidated by the registrar of Co-operative Societies following an order from the Reserve Bank of India.

"The bank had extended loans to nearly 300 people between 1993 and 2001 and most of the beneficiaries had not repaid their loans. Further investigation into the case is under way," said an Economic Offences Wing official.

Mishra, however, denied the allegations.

"I was in charge of the bank twice and took charge when the bank was in its 43rd year and it was struggling to revive. I took up the challenge of reviving it. The allegations against me are completely false and politically motivated," said Mishra.

ED grills Sarathi

The enforcement directorate today continued its interrogation of associates of Surendra Raula alias Sarathi baba over the financial dealings of the trust by the self-styled spiritual leader for the third day. The agency today grilled Sishir Khatua, a close aide of Sarathi, for nearly three hours.

It interrogated other associates - Bijay Sahu, Dharanidhar Mallik and Mallik's son Surendra - on Tuesday. The agency had also interrogated Sartahi's brother Debendra Raula to find the money trail of the trust. Sarathi, who was arrested on August 8 last year on various charges, is at present lodged in Choudwar jail.