Karnataka Congress MLA Nagendra 'masterminded' Valmiki corporation scam, says ED

Bengaluru: The Enforcement Directorate (ED) on Wednesday said that Congress MLA B Nagendra masterminded the scam in the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd (KMVSTDCL) and moved the corporation’s account to the Union Bank of India's (UBI) MG Road branch.

The observations were made in the chargesheet, or the prosecution complaint in money laundering cases, by the ED on September 9 before the Special Court for MPs and MLAs in Bengaluru. However, the Central agency issued the press release regarding this on Wednesday. DH had reported the observations on September 11.

Nagendra, who was the former ST Welfare Minister, resigned in June. He was named as the primary accused along with 24 others, including his key associates like Satyanarayana Varma, Etakari Satyanarayana, J G Padmanabha, Nageshwar Rao, Nekkenti Nagaraj, and Vijay Kumar Gowda.

“ED investigation revealed that under the influence of Nagendra, the account of the corporation was moved to the MG Road Branch without any proper authorisation, where Rs 187 Crore, including Rs. 43.33 Crore from the State Treasury under the Ganga Kalyana Scheme, were deposited without following proper procedures and in violation of government guidelines,” the ED claimed.

“These funds were subsequently siphoned off through multiple shell accounts and converted into cash and bullion. ED investigation also revealed that an amount of Rs. 20.19 Crore of the diverted funds was used to support a candidate contesting the 2024 Lok Sabha election from the Bellary constituency, as well as for the personal expenses of B. Nagendra,” it added.

The ED said that the evidence of this expenditure was discovered during search and seizure operations and corroborated by financial analysis and statements.

“Details of these election expenses were retrieved from the mobile phone of Vijay Kumar Gowda, who handled the cash on Nagendra’s instructions. Nagendra, who resigned after the scam came to light, is also accused of obstructing the investigation by destroying mobile phones and instructing others to remain silent. ED arrested Nagendra and five other key accused during the investigation. Further investigation is under progress,” the ED said.