Bengaluru: A substantial amount of the Rs 89.62 crore misappropriated from the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation was used to procure a significant quantity of liquor just before the 2024 Lok Sabha elections, the Enforcement Directorate (ED) probing the alleged irregularities said on Wednesday.
“ED investigation revealed that approximately Rs 90 crore were diverted to 18 fake accounts in Andhra Pradesh and Telangana,” the agency said in a statement.
“The diverted funds were then layered through fake and shell accounts, with cash and bullion dispersed among the accused. Additionally, high-end vehicles, including a Lamborghini, were purchased using proceeds from the scam.”
The ED initiated the probe into the alleged scam based on FIRs registered by the state police and the Central Bureau of Investigation (CBI).
On July 12, the ED arrested B Nagendra, the former Minister of Scheduled Tribal Welfare and Youth and Sports in the Karnataka government led by Chief Minister Siddaramaiah, under the provisions of the Prevention of Money Laundering Act (PMLA), following a massive search operation across 23 premises in four states.
Nagendra was remanded in ED custody till July 18. The Central agency is likely to seek a further extension to continue the investigations.
“During the search operations at Nagendra's and Basanagouda Daddal's (corporation chairman) premises, ED recovered incriminating documents linking them to the handling of diverted funds during recent general elections,” the agency said.
“Additionally, associates closely connected to Nagendra were implicated in fund diversion and cash management. Incriminating evidence related to the handling of these illicit funds was also discovered at the residence of the Corporation's chairman, Basanagouda Daddal,” it added.
The alleged misappropriation of Rs 89.62 crore belonging to the corporation came to the fore after accounts superintendent Chandrashekhar died by suicide on May 26 at his Shivamogga residence.
A note left behind by the dead blamed JG Padmanabha, the suspended MD of the corporation, Parashurama G, the Accounts Officer, and Union Bank of India (UBI) Chief Manager Suchismita Rawal.
As the alleged scam broke, Nagendra resigned from the Cabinet. Parallel investigations are also being held by a Special Investigation Team (SIT), which has arrested over 11 suspects and froze 197 bank accounts, constituted by the Congress government and the Central Bureau of Investigation (CBI).
Nagendra’s wife quizzed
The ED on Wednesday questioned the wife of Nagendra. Manjula was taken to the central agency’s office in Shanti Nagar on Wednesday afternoon. She was questioned to ascertain if she had any role to play in the misappropriation of funds, according to well-placed sources.