Raids are being conducted in locations including the residential premises of three MLAs — Nara Bharath Reddy, JN Ganesh, and Dr NT Srinivas — and Bellary MP E Tukaram
Published Jun 11, 2025 | 10:35 AM ⚊ Updated Jun 11, 2025 | 10:35 AM
Enforcement Directorate.
Synopsis: The Enforcement Directorate is conducting searches at eight locations in Karnataka in connection with the alleged scam at the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited. Raids are being conducted in locations including the residential premises of three MLAs and an MP.
The Enforcement Directorate (ED) is conducting searches at eight locations in Karnataka — five in Ballari and three in Bengaluru — on Wednesday, 11 June, in connection with the alleged scam at the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL).
Raids are being conducted in locations including the residential premises of three MLAs — Nara Bharath Reddy, JN Ganesh, and Dr NT Srinivas — and Bellary MP E Tukaram
The searches are being conducted in connection with an investigation related to the amount siphoned off from the accounts of the Valmiki Corporation and the alleged use of the same for election expenses in the form of cash distribution to voters and Congress workers during the 2024 Lok Sabha elections.
In its charge sheet, the ED had unveiled a trail of illegal fund transfers. Funds were allegedly funnelled into a single account before transferring it to 18 fake accounts. Huge amounts were then diverted to various individuals and entities.
This elaborate operation was carried out by a group of conspirators in collusion with a few bank officials. The ED said the group was led mainly by former minister and Ballari Rural MLA B Nagendra of the Congress. He was the minister for scheduled tribes welfare when the alleged scam took place.
ED claims that funds from the Valmiki Corporation’s account were initially transferred from Union Bank of India‘s Vasant Nagar branch to the MG Road branch in Bengaluru.
According to the ED: “The investigation revealed the illegal diversion of ₹89.62 crore from the Corporation’s accounts into fake accounts in Andhra Pradesh and Telangana, later laundered through shell entities.”
“An additional ₹20.19 crore of diverted funds was allegedly used to support a candidate in the 2024 Lok Sabha election from Ballari, along with personal expenses for Nagendra,” the ED stated that they have collected necessary evidence as well.
Nagendra and KMVSTDC managing director JG Padmanabha allegedly played pivotal roles in executing the transfers without the necessary approvals.
The conspirators, ED alleged, transferred a substantial amount from the Corporation to the MG Road account. Over just three months, ₹187.33 crore was transferred into Union Bank of India’s MG Road Branch account, laying the groundwork for the subsequent fraudulent activities, the chargesheet said.
It further stated that the conspirators opened 18 fake accounts in the names of existing companies at the Banjara Hills branch of RBL Bank in Hyderabad under the main account of First Finance Credit Cooperative Society Limited.
These 18 fraudulent accounts under the name of various entities/firms, created using forged documents, served as the primary vehicles for siphoning off money from the Corporation’s account.
In a series of calculated transfers, hefty sums were shifted from the Corporation’s MG Road account to these fraudulent accounts, facilitating the embezzlement of nearly ₹90 crore.
Once the funds were deposited in the fake accounts, the conspirators further redirected the money through e-banking to various other entities and individuals.
The initial FIR regarding the Valmiki Corporation scam was lodged on 28 May 2024 at the High Grounds police station in Bengaluru. Subsequently, the state government assigned the probe to a Special Investigation Team (SIT) of the Criminal Investigation Department (CID).
On 6 June 2024, the ED registered an Enforcement Case Information Report, leading to Nagendra’s arrest on 12 July. The ED submitted a 127-page chargesheet to the court in September 2024.
(Edited by Muhammed Fazil with inputs from Nolan Pinto.)
