Bengaluru: An estimated Rs 20.19 crore of the funds misappropriated from the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd (KMVSTDCL) was diverted to Ballari during the 2024 Lok Sabha elections in May, the first chargesheet by the Enforcement Directorate (ED) has mentioned.
At the time, former Karnataka ST Welfare Minister B Nagendra, also a Congress MLA (Bellary Rural), was the Ballari district in-charge minister. Congress’ E Tukaram had won the Bellary constituency with 7,30,845 votes.
Nagendra, who resigned in June and was named the accused 1 by the ED, is in judicial custody after his arrest by the Central agency on July 12. KMVSTDCL functioned under Nagendra’s department. Chargesheet details accessed by DH shows that 25 accused were named by the ED.
The ED also attached a chart detailing the distribution of the siphoned-off sum, along with other “ïncriminating evidence”.
Some of the key accused are Satyanarayana Varma from Hyderabad (accused 2), Sathyanarayana Etakari, the chairman of First Finance Credit Co Society Ltd in Hyderabad (accused 3); former KMVSTDCL MD J G Padmanabha (accused 4); and B Vijayakumar (accused 8), Nagendra’s personal assistant.
The chargesheet contained 144 pages of the prosecution complaint and listed 15 witnesses. It was submitted to the Special Court for MLAs/MPs (CCH-82) on Monday afternoon by P Prasanna Kumar, Special Public Prosecutor (SPP) for the ED.
The accused have been charged under Sections 3 (offence of money laundering) and 4 (punishment for money laundering) of the Prevention of Money Laundering Act (PMLA), 2002. The ED submitted that further probe will continue.
According to the ED, Rs 89.62 crore was misappropriated. Earlier, the ED had said its probe revealed around Rs 90 crore was diverted to 18 fake accounts in Andhra Pradesh and Telangana.
“The diverted funds were then layered through fake and shell accounts, with cash and bullion dispersed among the accused. ED uncovered that a substantial amount of funds were utilised to procure a significant quantity of liquor just before the general elections,” the central agency said.
The ED chargesheet directly implicates Nagendra, while the first chargesheet filed in August by the Special Investigation Team (SIT) of the Karnataka police made no mention of the Congress MLA.
The SIT had named Padmanabha; Parashuram Durgannanavar, the former KMVSTDCL accounts officer; Sathyanarayana Etakari; Nekkunte Nagaraj, acquaintance of ex-minister Nagendra; Nageshwar Rao; M Chandramohan, Satyanarayana Varma and Saiteja from Hyderabad; G K Jagadish from Shivamogga; Teja Thammaiah from Bengaluru; Pittala Srinivasa and Khaki Srinivasa Rao from Andhra Pradesh.
The SIT was set up by the Siddaramaiah-led Congress government after the corporation’s accounts superintendent Chandrashekhar P died by suicide on May 26 at his Shivamogga residence.
In the second chargesheet filed later in August, the SIT charged Padmanabha and Durgannanavar under IPC Sections 306 (abetment of suicide) and 34 (acts done by several persons in furtherance of common intention) and 3(2)(v) (punishments for offences of atrocities) of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act after investigating Chandrashekhar’s death.
Chandrashekhar’s death revealed the alleged misappropriation to the tune of Rs 89.62 crore. A note left behind by the deceased had named senior corporation officials and bank officials while hinting at the involvement of an unnamed “minister”.
As the SIT continued the probe, the ED began a parallel investigation, while an FIR was registered by the Central Bureau of Investigation (CBI).