Karnataka Tribal development corporation scandal: CBI begins investigation

PTI, Jun 5, 2024, 2:44 PM IST

The CBI has launched an investigation into a massive illegal money transfer scandal involving the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd, confirmed Home Minister G Parameshwara on Wednesday.

The state Cabinet is expected to make a decision about extending the investigation to cover state government departments involved, based on a formal request from the central agency.

The Union Bank of India had lodged a formal complaint the previous week with the CBI regarding the embezzlement of public funds by its MG Road branch linked to the state-run Corporation. Three bank officials were subsequently suspended.

The Corporation previously filed an FIR against senior union bank officials for the misappropriation of Rs 88 crore.

Parameshwara explained that the CBI initiated the investigation following a bank letter to them, citing a central government rule that allows the CBI to probe any bank fraud exceeding Rs three crore.

The state’s Home Minister assured full cooperation from the state government during the investigation.

“We are considering whether the CBI can also inspect the Tribal Welfare Department and the cooperative banks under state authority. The CBI will need to formally write to us, which will lead to a government decision. The final call will be made by the Cabinet after the current model code of conduct period,” added Parameshwara.

He also mentioned the potential inquiry into Scheduled Tribes Welfare Minister B Nagendra if the CBI deems it necessary. The scandal came to limelight following the suicide of accounts superintendent Chandrashekhar P, who left a death note detailing the unauthorized transfer of Rs 187 crore, where Rs 88.62 crore was redirected into various accounts linked to IT companies and a Hyderabad-based cooperative bank.

The note implicated Corporation officials and Union Bank personnel, asserting that the “Minister” had verbally ordered the funds transfer.

A Special Investigation Team, led by Manish Kharbikar, has been assigned by the state government to conduct further investigation. The opposition BJP is pressing for the dismissal of Minister Nagendra and a comprehensive CBI probe.