CHENNAI: The Enforcement Directorate (ED) conducted searches in Tamil Nadu and Kerala on Wednesday in connection with a money laundering investigation against Bharath Lajhna Multi State Cooperative Society (BLM) and its founder R Premkumar.

Officials said 11 premises in the two states were covered by the Kochi office of the central agency under the Prevention of Money Laundering Act (PMLA).

It is alleged that Premkumar misused his influence to divert crores of rupees that the society collected from public depositors to the accounts of his wife and relatives for personal use. The ED claimed he pledged the society's Ragam Theatre without the money reaching the society and acquired about 500 acres at Kancheepuram in his wife's name.

Meanwhile, after coming under the radar of the Kerala police and the Enforcement Directorate, the society claimed that it has been providing appropriate profits to all their members and deposits for the last 20 years.

Terming Premkumar’s arrest by the Kerala police on October 29 as illegal, citing a magistrate order, the group accused the police of planning to register further false cases. "Active efforts are under way to cause damage to the reputation of BLM and its founder," it said in an official statement.

In the statement, BLM added that the annual reports and accounts of the institution were properly audited and approved at the annual general body meeting and filed with the Central Register, Central Multi State Co-operative Society.