A special court in Karnataka has granted the Enforcement Directorate (ED) an extension of five days in the custody of former Karnataka Minister B Nagendra. This development comes in connection with a money laundering investigation linked to alleged irregularities in the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd.
Court Grants ED’s Request
Today, Ballari Rural Congress MLA B Nagendra was brought before the court as his current ED custody expired. The court’s decision extends his custody until July 22. Nagendra was arrested by the ED on July 12 after being questioned in connection with the case. Earlier, amid allegations related to the scam, Nagendra resigned from his post as Scheduled Tribes Welfare Minister on June 6.
Extensive Search Operations and Allegations
Earlier this month, the ED conducted searches at multiple locations, including premises belonging to Nagendra and Congress MLA Basanagouda Daddal, who serves as Chairman of the Corporation. These searches covered approximately 20 locations spread across Karnataka, Andhra Pradesh, Telangana, and Maharashtra. The case has been registered under the Prevention of Money Laundering Act (PMLA).
Allegations of Misappropriation
On Wednesday, the ED alleged that a significant amount of funds misappropriated from the Corporation were utilized to procure liquor during the recent Lok Sabha elections, in addition to acquiring high-value vehicles. The agency further stated that associates linked to Nagendra were involved in fund diversion and cash management. According to the ED, approximately ₹90 crore were diverted to 18 fake accounts in Andhra Pradesh and Telangana, originating from the funds of the Valmiki Corporation.
Escalating Scandal and Official Responses
The scandal gained attention after Chandrasekharan P, the Corporation’s accounts superintendent, tragically took his own life on May 26, leaving behind a note alleging unauthorized transfers totaling ₹187 crore from the Corporation’s bank account. Subsequently, ₹88.62 crore was illegally moved to various accounts, including those of reputed IT companies and a cooperative bank in Hyderabad. The state government has formed a Special Investigation Team (SIT), led by Manish Kharbikar, Additional Director General of Police (Economic Offences), CID, to handle the investigation.
Additional Investigations
Earlier this month, the SIT had interrogated Nagendra and Daddal in connection with the case. Additionally, Union Bank of India’s MG Road branch filed a complaint with the CBI concerning the embezzlement of Corporation funds, prompting the premier investigation agency to initiate its own probe.
This unfolding case continues to draw significant scrutiny, highlighting ongoing developments and allegations of financial misconduct within the Karnataka government’s institutions.