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ED arrests former MD over scam in Valmiki corporationA highly placed ED source confirmed to DH that JG Padmanabha, the former MD of the KMVSTDC, and Etakari Satyanarayana, the chairman of First Finance Credit Co-Operative Society Limited, had been taken into custody.
Chetan B C
Last Updated IST
<div class="paragraphs"><p>The logo of the Enforcement Directorate. </p></div>

The logo of the Enforcement Directorate.

Credit: PTI File Photo

The Enforcement Directorate (ED) has arrested the former managing director of the scam-hit Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation.

A highly placed ED source confirmed to DH that JG Padmanabha, the former MD of the KMVSTDC, and Etakari Satyanarayana, the chairman of First Finance Credit Co-Operative Society Limited, had been taken into custody. The two men were previously arrested by the Karnataka Police's Special Investigation Team (SIT) and were lodged in the Bengaluru Central Prison.

On Friday, the ED obtained a body warrant from the court and produced Satyanarayana and Padmanabha before a magistrate. The agency has secured their custody until August 29.

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According to the ED source, both suspects played a "crucial" role in funds misappropriation by opening numerous bank accounts to transfer the stolen money.

"A preliminary probe has revealed that these two played a major role in siphoning off the corporation's funds. The misappropriated money was sent to multiple bank accounts, opened by these two suspects,” the source told DH.

The source added that all these accounts were opened in Hyderabad without proper Know Your Customer (KYC) verification.

The ED's FIR lists Satyanarayana as accused number three and JG Padmanabha as accused number four.

Earlier, the ED arrested former state minister B Nagendra in connection with the scam after raiding over 20 places in Bengaluru and Raichur.

According to the ED, the misappropriated funds were used to purchase a significant quantity of liquor just before the 2024 Lok Sabha elections.

What is the scam?

The scam involved the misappropriation of Rs 89.62 crore belonging to the corporation. It came to light after the corporation’s accounts superintendent, Chandrashekhar, died by suicide on May 26 at his Shivamogga residence.

The SIT has submitted a charge sheet in the case and has given Nagendra a clean chit.

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(Published 24 August 2024, 04:59 IST)