CBI takes up probe into multi-crore money transfer case involving state-run corporation in Karnataka

Bengaluru: The CBI has taken up the probe into the multi-crore illegal money transfer case involving Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd, Home Minister G Parameshwara said on Wednesday.

The Cabinet will take a call on handing over to the CBI investigation covering the state government departments linked to the case, once it gets a formal request from the central agency, he said here.

Mumbai-headquartered Union Bank of India last week filed a formal complaint with the CBI in connection with embezzlement of public money of the state-run Corporation involving its MG Road branch. It had also suspended three officials.

The Corporation had filed an FIR against top Union Bank of India officials with the police, over embezzlement of Rs 88 crore.

"Bank had written to the CBI, there is a rule in the central government that if there is a case of bank fraud of over Rs three crore CBI can suo moto probe it. So on the basis of the bank's letter to CBI, they have taken up the case," Parameshwara told reporters here.

The Minister said the state government will extend all cooperation to the CBI in its probe.

"We are yet to decide whether the CBI can probe into -- Tribal Welfare Department (under which the Corporation comes), and money has (allegedly) gone to cooperative banks that come under the cooperative department -- which comes under the state government's departments.

For us to give a complete probe to the CBI, they will have to write to us, after which the government will take a decision," he said, adding that the Cabinet will decide on it after the model code of conduct is over.

Responding to a question, Parameshwara added: "In case the money has come back to the bank accounts of the corporation, it will be looked into by the CBI ,as it is a matter of bank's money transaction." In case the CBI feels that it needs to subject the (Scheduled Tribes Welfare) Minister (B Nagendra) to inquiry, "they might do it. I don't know what their mandate is." The illegal money transfer issue came to light, after accounts superintendent at the Corporation, Chandrashekhar P, died by suicide on May 26, leaving behind a death note.

The note revealed the unauthorised transfer of Rs 187 crore belonging to the Corporation from its bank account, and from that, Rs 88.62 crore was illegally moved to various accounts allegedly belonging to 'well-known' IT companies and a Hyderabad-based cooperative bank.

Chandrashekhar has named the Corporation's now suspended Managing Director J G Padmanabh, accounts officer Parashuram G Durugannavar, and Union Bank of India Chief Manager Suchismita Rawal in the note, while also stating that the 'Minister' had issued oral orders for transferring the funds.

The state government last week constituted a Special Investigation Team (SIT) headed by Manish Kharbikar, Additional Director General of Police, Economic Offences, at the Criminal Investigation Department (CID) in Bengaluru, to conduct the probe.

Opposition BJP has demanded the removal of Nagendra over allegations against him in connection with the case, and also a CBI probe.