Kerala’s half-price CSR scam: How a 26-year-old duped thousands with fake NGO discounts

Thousands in Kerala were duped, with an estimated loss exceeding Rs 600 million

The recent CSR scam, widely known as the half-price scam, has taken Kerala by storm, with authorities uncovering a large-scale fraudulent scheme where individuals were deceived into paying for products at “half price.”

These products, including scooters, laptops, and other home appliances, were promised under the false pretext of utilising Corporate Social Responsibility (CSR) funds.

The mastermind behind the operation, Ananthu Krishnan, exploited a network of non-governmental organizations (NGOs) to convince people that the discounts were funded by Corporate Social Responsibility (CSR) contributions from major companies.

However, investigations revealed that these CSR funds were non-existent, leading to widespread deception across the state.

Ananthu Krishnan: The man behind the fraud

Ananthu Krishnan, a 26-year-old from Thodupuzha in Idukki district, was arrested after numerous complaints surfaced from across Kerala.

Krishnan offered products like scooters, home appliances, and laptops at “half price,” claiming these deals were made possible by CSR funds.

However, investigations revealed that these funds never existed. Krishnan, who had a history of fraud in Muvattupuzha and Idukki, used over two dozen bank accounts to funnel money from approximately 30,000 victims.

Who is Ananthu Krishnan?

A graduate of Kudayathoor, Idukki, Krishnan leveraged his local connections to launch several NGOs in his village, according to media reports.

According to C.S. Sreejith, a local panchayat member quoted in media reports, “Ananthu uses his relationships to his advantage. He set up NGOs named after Sardar Patel and Abdul Kalam, both of which were listed in Kudayathoor.”

His father’s a carpenter, and his mother works with the state civil supplies corporation. After starting his NGOs, Krishnan’s life changed rapidly—he bought property, drove expensive cars, and distributed scooters and laptops in his village.

However, as his wealth grew, so did the complaints from those he deceived.

Scope of the scam

The scam’s scale is staggering, with over 100 cases registered and an estimated loss of Rs 600 million. Police believe the total amount swindled could rise to Rs 4-5 billion once all the complaints are fully investigated.

Krishnan’s scheme primarily ran through a network of “seed societies” and “consultancies.”

He offered products like scooters worth Rs 1.20 lakh (Rs1,20,000) for Rs 60,000 and laptops (worth Rs 60,000) for Rs 30,000. Applicants paid half of the product price along with a registration fee of Rs 500.

A senior police officer explained, “This was a tactic to gain the public’s trust. Initially, Krishnan delivered products using the money collected from new applicants, while also pocketing commissions from bulk purchases of scooters and electronics.”

How Krishnan pulled it off

Krishnan built a network of trust by claiming to be the national coordinator of the National NGO Federation, convincing people that he managed CSR funds from corporate giants. Early on, he delivered products to attract more applicants and increase the scheme’s credibility.

However, once complaints mounted and Krishnan failed to deliver on promises, the fraudulent scheme began to unravel. He attempted to return the money, but the volume of complaints grew uncontrollably, leading to police action.

Krishnan also took advantage of his local ties, setting up multiple consultancies under his name. His influence, especially with local political figures, is now under investigation.

Role of NGOs and political figures

Several prominent individuals, including members of the National NGO Confederation and political figures, are under scrutiny for their involvement.

Krishnan has admitted to giving money to political leaders, further complicating the investigation. Despite claiming that CSR funds were used for the scam, many companies were unaware that their names were being misused, and no CSR funds were actually involved.

Rising complaints

After Krishnan’s arrest, even more victims came forward. Thousands of people, including many women, had signed up for the scheme, hoping to benefit from the discounts.

Initially, Krishnan delivered products to gain trust, but as the scheme failed, he could not meet his commitments. Attempts to refund money only fueled the rising number of complaints.

Current status of the investigation

Given the scale of the fraud, Kerala’s Director General of Police (DGP), Shaik Darvesh Sahib, has ordered the transfer of 34 cases related to the scam to the State Crime Branch.

These cases involve allegations of cheating and misappropriation of funds, with the total amount swindled estimated at Rs 37 crore. As more cases are verified, this figure is expected to rise further.

The move to transfer the cases to the State Crime Branch ensures a more coordinated and thorough investigation.