SNDP microfinance scam: Kerala HC to consider whether sanction is necessary to prosecute accused

The Kerala High Court will consider whether a sanction is necessary under the Prevention of Corruption Act, 1988, to prosecute the accused in the Sree Narayana Dharma Paripalana (SNDP) Yogam microfinance scam.

The court was considering a petition to appoint a Special Investigation Team to probe the alleged misappropriation of loans disbursed by the Kerala State Backward Classes Development Corporation to the Yogam between 2003 and 2014, intended to benefit backward communities.

The Backward Classes Development Secretary informed Justice A. Badharudeen on Friday (September 18, 2026) that the accused, including SNDP Yogam general secretary Vellappally Natesan, were private parties, and the department need not issue prosecution sanction since they were not government officials. 

Petitioner’s contention

The petitioner, M.S. Anil of Alappuzha, contended that sanction was required to prosecute the accused since any office-bearer or employee of an educational, scientific, social, cultural, or other institution receiving financial assistance from the Union or State government was classified as a public servant under the Act. 

The Special Public Prosecutor for Vigilance also informed the court that sanction was necessary and stated that the Secretary’s view on the matter was incorrect.

In this regard, the court directed the investigating officer to produce copies of the final reports filed to obtain prosecution sanction from the department. The matter would be considered again on September 22, 2026.