Karnataka government suspends two officials of Valmiki Corporation in illegal money transfer case

The unauthorised transfer of ₹88.62 crore from the corporation’s bank account came to light after an Accounts Superintendent of the KMVSTDC, P Chandrashekhar, died by suicide on Sunday.

BySouth First Desk

Published May 30, 2024 | 1:07 PM Updated May 30, 2024 | 1:07 PM

Karnataka government official dies by suicide

The State government on Wednesday, 29 May, suspended the Managing Director and an official of the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd (KMVSTDC) over allegations of an illegal money transfer.

The unauthorised transfer of ₹88.62 crore from the corporation’s bank account came to light after an Accounts Superintendent of the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd, P Chandrashekhar, died by suicide on Sunday evening, leaving behind a note.

He has named the corporation’s 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 minister in charge had issued oral orders for transferring the funds.

The opposition BJP has demanded the resignation of Scheduled Tribes Welfare Minister B Nagendra, following the allegations.

Officials suspended for dereliction of duty

Padmanabh and Durgannanavar have been suspended as they allegedly overlooked the creation of a new bank account that facilitated unauthorised transfer of funds.

They have been suspended pending inquiry on charges of dereliction of duty, negligence and violation of financial rules, their suspension orders said.

According to the government, the corporation had its savings bank account in the Vasanth Nagar branch of the Union Bank of India, but another account was opened in the MG Road branch of the bank without authorisation, and funds to the tune of ₹187 crore was moved to the new account “illegally”.

Further stating that between 5 and 23 March , ₹88.62 crore was withdrawn from the MG Road branch account by anonymous persons, the suspension orders of both officials said that they did not act on it and held them responsible.

Pointing out that the money was moved to 14 “anonymous accounts” using “forged” cheques and RTGS letters, and an unknown number was entered instead of the registered mobile number for this purpose, the government said that it was also ensured that the intimation of the transaction did not reach the corporation’s registered email address.

Money transferred to anonymous accounts

It was found that through 14 “virtual accounts”, money went to accounts in the name of well-known IT companies and a Hyderabad-based cooperative bank, the government said, adding, “These accounts were frozen and ₹5 crore was returned to the corporation, and efforts are on to to ensure the return of the remaining amount.”

Noting that Padmanabh, despite getting to know about the illegal transfer of money to 14 different bank accounts on 22 May, submitted a report to the government only on 27 May, a day after Chandrashekhar died by suicide leaving a note naming officials involved in the scam, the government said.

The report was submitted after it asked for it, following allegations, and the delay on his part in reporting the matter amounted to dereliction of duty, the government added.

Durgannanavar has been found to have failed in his duty in managing the bank accounts and financial transactions of the corporation, and in bringing it to the notice of higher officials, it added.

Following Padmanabh’s suspension, the government has given additional charge to ST Welfare Department’s Joint Director KR Rajkumar as the Managing Director of the Corporation, official sources said.

Also Read: Karnataka official dies by suicide, alleges superiors pressured him to illegally transfer ₹85 crore

Chandrashekar’s suicide note

Chandrashekar, 48, died by suicide, alleging in his suicide note that some officials pressured him to transfer crores of money to an unofficial account.

“I am not a coward but cannot bear humiliation, I could not think of any other way,” was the last sentence penned by him on Sunday, 26 May.

In the six-page suicide note accessed by South First, he has levelled corruption allegations to the tune of ₹85 crore against Padmanabh, Parashuram G Durugannavar and Suchismita Rawal.

Based on the death note, an FIR was registered against the three accused at Vinobanagara Police Station in Shivamogga on 27 May. Two days after the suicide of the government official, the Congress government, on 28 May, transferred the case to the Central Investigation Department (CID).

Minister for ST Welfare B Nagendra told reporters: “The government officer suicide case has been transferred to the CID. They will look into all the matters including the death note and allegations made in it. I was deeply pained by the demise of Chandrashekar.”

“KMVSTDC’s MD Padmanabha has also filed a complaint stating that his signature was forged and is unaware of these illegal fund transfers from one bank account to another bank account. The irregularities have been alleged to the tune of ₹85 crore. As per the prima facie, it appears that bank employees are also involved in this scandal,” stated Nagendra.

Earlier in the day, Home Minister G Parameshwara said that a CID probe is on and the truth will be known from the probe.

(Edited by Shauqueen Mizaj, with PTI inputs)