Valmiki Corp. funds used to purchase liquor before general elections: ED

PTI, Jul 17, 2024, 8:34 PM IST

New Delhi: The Enforcement Directorate on Wednesday alleged that a “substantial” amount of funds “misappropriated” from the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited were used to procure liquor during the recently-concluded Lok Sabha elections apart from some highly-priced vehicles.

The federal probe agency that has arrested sitting Congress MLA and former cabinet minister of the state B Nagendra in this case recently issued a statement alleging the associates connected to the legislator were “implicated in fund diversion and cash management.”

Nagendra, a former minister of Tribal Welfare and Sports, was arrested by the ED last week after it conducted raids against him and another Congress MLA from Raichur rural seat Basanagouda Daddal in Bengaluru.

The former minister is in ED custody till July 18.

Probe found, the agency claimed, that “about Rs 90 crore were diverted to 18 fake accounts in Andhra Pradesh and Telangana (from the funds of the Valmiki corporation). The diverted funds were then layered through fake and shell accounts, with cash and bullion dispersed among the accused.

“B Nagendra, the former minister, also resigned following the exposure of the scam,” the ED said.

It added that “a substantial amount of funds were utilised to procure a significant quantity of liquor just prior to the general elections.

“Additionally, high-end vehicles, including a Lamborghini, were purchased using proceeds from the scam,” it said.

The general elections were held during April-May and the results were declared on June 4.

During the searches at the premises of Nagendra and Daddal (Corporation’s Chairman), ED recovered “incriminating documents linking them to the handling of diverted funds during recent general elections.”

“Additionally, associates closely connected to B Nagendra were implicated in fund diversion and cash management,” it said.

The agency said some “incriminating” evidence related to the handling of these illicit funds was also discovered at the residence of Daddal.

The alleged scam came to fore after accounts superintendent of the Corporation, Chandrasekharan P was found dead on May 21. He wrote a suicide note alleging illegal transfer of money from the Corporation to various bank accounts.

Subsequently two officials were suspended. With mounting pressure minister Nagendra resigned on May 29.

The Congress government thereafter constituted a Special Investigation Team (SIT), which has so far arrested 11 people in connection with the case.

In the suicide note, Chandrasekharan alleged that there was an unauthorised transfer of Rs 187 crore belonging to the state-run Corporation from its bank account.

Further, Rs 88.62 crore was illegally deposited into various accounts of some IT companies and a Hyderabad-based cooperative bank.

While the state government has constituted the SIT to investigate it, the Central Bureau of Investigation is also probing it simultaneously based on a complaint by the Union Bank of India.

The agency questioned Nagendra’s wife Manjula on Wednesday as part of this investigation.