The case surfaced after the suicide of a corporation employee, Chandrashekhar, on 26 May 2024. He left a note detailing corruption and unauthorised fund transfers.
Published Aug 27, 2025 | 10:35 PM ⚊ Updated Aug 27, 2025 | 10:35 PM
The Office of the Enforcement Directorate. (Supplied)
Synopsis: The ED has provisionally attached properties worth about ₹5 crore in connection with the alleged Valmiki Corporation scam in Karnataka, belonging to four individuals. The case relates to the diversion of over ₹89 crore meant for tribal welfare through fraudulent accounts, with the funds allegedly spent on luxury purchases.
The Enforcement Directorate (ED), Bengaluru Zonal Office, has provisionally attached properties worth about ₹5 crore in connection with the misappropriation of funds of the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL).
In a statement on Wednesday, 27 August, the agency said it had attached immovable properties in the form of land and flats worth ₹4.45 crore belonging to four people: Nekkenti Nagaraj, Chandra Mohan, Golapalli Kishore Reddy and Etakeri Satyanarayana. Movable property in the form of bank accounts amounting to ₹50 lakh in First Finance Credit Cooperative Bank Limited was also attached.
The KMVSTDCL is a state-run body in Karnataka tasked with the welfare of Scheduled Tribes. The alleged scam, which came to light in 2024, involved the misappropriation of about ₹94.73 crore meant for tribal welfare programmes.
The case surfaced after the suicide of a corporation employee, Chandrashekhar, on 26 May 2024. He left a note detailing corruption and unauthorised fund transfers. The ED initiated its probe following FIRs filed by the Karnataka Police and the Central Bureau of Investigation.
In its statement, the ED said it was alleged the accused “illegally transferred the money from the account of the KMVSTDCL and misappropriated the funds with the intent to cheat and defraud the Corporation of public money amounting to Rs 89.63 crore by forging the valuable securities and documents.”
The agency said KMVSTDCL’s official account had been shifted to a fraudulently opened account at the MG Road branch of Union Bank of India, in collusion with bank officials.
Funds from other accounts and even the treasury were allegedly pooled into this account. From there, the ED said, “an amount of Rs 89.63 crore was diverted from this fraudulently opened Corporation’s accounts to 18 fake bank accounts opened with First Finance Credit Cooperative Bank Limited in Hyderabad, in connivance with the bank’s Chairman.”
The funds were allegedly layered through shell and fictitious accounts before being converted into cash and bullion, which were then distributed among the accused.
The agency added that part of the diverted funds was channelled into election expenditure. Proceeds were also used for luxury spending, including the purchase of a Lamborghini.
“These facts were corroborated by the accommodation entry providers, bullion traders, gift card trader and luxury car dealer,” the statement said.
According to the agency, “the Proceeds of Crime acquired by the accused persons out of the siphoning off funds from the account of Corporation have been utilised by them for personal purposes.”
Further investigation is under way.
(Edited by Dese Gowda)
