Karnataka minister Nagendra confirms Rs 87 cr scam in state-run corporation, but refuses to resign

Bengaluru: Karnataka Scheduled Tribes Welfare Minister B Nagendra confirmed Tuesday that Rs 87 crore was embezzled at a state-run corporation under his department, but refused to resign even as an official died by suicide after linking the lawmaker to this scam.

The government has ordered a probe by the Criminal Investigation Department (CID) into the scam at the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd.

It is learnt that Rs 87 crore was transferred without authorisation from the corporation’s bank account at the MG Road branch of Union Bank of India to other branches of the same bank. Apparently, the money was moved to the accounts of some software companies. The corporation's bank account had a total of Rs 187 crore.

The embezzlement of Rs 87 crore came out after accounts superintendent Chandrashekhar died by suicide Sunday evening, leaving behind a note blowing the lid off the scam.

He named corporation’s managing director JG Padmanabh, accounts officer Parashuram Durugannavar and Union Bank of India chief manager Suchismita Rawal as responsible for his death.

Chandrashekhar also wrote that the minister had issued oral orders on transferring the funds.

“I don’t know why he wrote that. We must first know why I’m being linked to this. There’s no question of my resignation because I had no role. I’ve never spoken to an accounts officer. Also, I always give directions in writing,” Nagendra said.

The Opposition BJP has sought Nagendra’s dismissal from the Cabinet. Chief Minister Siddaramaiah’s office has sought a report on the scam.

“I’m also shocked that something like this happened. We’re investigating this. The government has taken this as a matter of prestige. There’s no question of sparing anyone involved,” Nagendra said.

The unauthorised transfer of funds took place in March. Padmanabh, in his preliminary report, has claimed that his signature was forged to obtain cheque books. He also stated that his signature was faked on cheques to move the money.

“The MD says it was done in such a manner that he did not receive an SMS alert on the money being debited from the account,” Nagendra said. “But if it is found that it was indeed the MD’s signature, then we’ll ensure that he loses his job.”

Nagendra said the government’s first task is to get the money back. “So far, we’ve recovered Rs 28 crore. The Union Bank of India has been asked to send back the remaining money failing which an FIR will be filed against its officials,” he said.

Apparently, Padmanabh had questioned Chandrashekhar about the transfer of money. “The MD was told that the money will be recovered,” Nagendra said. “It’s a lapse on the MD’s part that he didn’t inform me. He’ll certainly face action for that.”

Nagendra said CID will also look at whether or not the MD pressured Chandrashekhar, leading to his suicide.

“If it wasn’t for the suicide, the scam wouldn’t have come out,” Nagendra said. “Officials would have hushed it up.”