CBI takes up probe into Karnataka illegal money transfer case involving state-run Cooperation

The Home Minister said that the Cabinet will take a call on handing over the entire investigation to the CBI after a formal request from it.

BySouth First Desk

Published Jun 05, 2024 | 7:16 PM Updated Jun 05, 2024 | 7:16 PM

Karnataka Congress leader takes a dig at NDA government

The Central Bureau of Investigation (CBI) has taken up the probe into the multi-crore illegal money transfer case involving Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd (KMVSTDC), Home Minister G Parameshwara said on Wednesday, 5 June.

The Cabinet will take a call on handing over to CBI investigation covering the state government departments linked to the case, once it gets a formal request from the central agency, he said.

Mumbai-headquartered Union Bank of India last week filed a formal complaint with the CBI in connection with the embezzlement of public money from the state-run Corporation involving the bank’s MG Road branch. It had also suspended three officials.

The Corporation had filed an FIR against top Union Bank of India officials with the police, over embezzlement of ₹88 crore.

“Bank had written to the CBI that there is a rule in the central government that if there is a case of bank fraud of over ₹three crore, CBI can suo moto probe it. So based on the bank’s letter to CBI, they have taken up the case,” Parameshwara told reporters.

The Minister said the state government will extend all cooperation to the CBI in its probe.

“We are yet to decide whether the CBI can probe into – the Tribal Welfare Department (under which the Corporation comes), and money has (allegedly) gone to cooperative banks that come under the cooperative department – which comes under the state government’s departments. For us to give the complete probe to the CBI, they will have to write to us, after which the government will take a decision,” he said, adding that the Cabinet will decide on it after the Model Code of Conduct is over.

Responding to a question, Parameshwara added: “In case the money has come back to the bank accounts of the corporation, it will be looked into by the CBI, as it is a matter of bank’s money transaction.”

“In case the CBI feels that it needs to subject the (Scheduled Tribes Welfare) Minister (B Nagendra) to inquiry, they might do it. I don’t know what their mandate is,” he added.

Related: Karnataka official dies by suicide, alleges superiors pressured him to illegally transfer ₹85 crore; case transferred to CID

Developments in illegal money transfer case

The illegal money transfer case came to light after P Chandrashekar – accounts superintendent at the Corporation – died by suicide, alleging in his suicide note that some officials pressured him to transfer crores of money to an unofficial account.

In the six-page suicide note accessed by South First, he had levelled corruption allegations to the tune of ₹88 crore against the KMVSTDC’s Managing Director, Accountant and Union Bank of India’s MG Road branch manager.

It revealed the unauthorised transfer of ₹187 crore belonging to the corporation from its bank account, and out of that ₹88.62 crore was illegally moved to various accounts allegedly belonging to “well-known” IT companies and a Hyderabad-based cooperative bank.

Two FIRs have been registered following Chandrashekar’s death. The first was against the three people named in his death note, and the second was against six bank officials for the alleged fraud.

The note revealed the unauthorised transfer of Rs 187 crore belonging to the Corporation from its bank account, and from that, ₹88.62 crore was illegally moved to various accounts allegedly belonging to “well-known” IT companies and a Hyderabad-based cooperative bank.

Chandrashekhar had named the Corporation’s now suspended Managing Director JG Padmanabh, accounts officer Parashuram G Durugannavar, and Union Bank of India Chief Manager Suchismita Rawal in the note, while also stating that the “Minister” had issued oral orders for transferring the funds.

The state government last week constituted a Special Investigation Team (SIT) headed by Manish Kharbikar, Additional Director General of Police, Economic Offences, at the Criminal Investigation Department (CID) in Bengaluru, to conduct the probe.

Meanwhile, the Opposition BJP has demanded the removal of Nagendra over allegations against him in connection with the case and a CBI probe.

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(Edited by Neena with PTI inputs)