Valmiki Corporation’s Rs 20 crore was diverted for Lok Sabha election purposes: ED

The ED, in its press release, said MLA Nagendra had been named as the key accused and mastermind behind the scam. It also said he allegedly orchestrated the fraud with the help of 24 others, including key associates like Satyanarayana Varma, Etakari Satyanarayana, J G Padmanabha, Nageshwar Rao, Nekkenti Nagaraj, and Vijay Kumar Gowda.

According to the ED, the investigation revealed that under Nagendra’s influence, the corporation’s account was moved to the M G Road branch without any proper authorisation. Rs 187 crore, including Rs 43.33 crore from the state treasury under the Ganga Kalyana Scheme, were deposited without following proper procedures and in violation of government guidelines. These funds were subsequently siphoned off through multiple shell accounts and converted into cash and bullion, the ED said.

The ED investigation also revealed that Rs 20.19 crore of the diverted funds were used to support a candidate contesting the 2024 Lok Sabha election from the Bellary constituency and for Nagendra’s personal expenses. The ED said evidence of these expenditures was discovered during search and seizure operations and corroborated by financial analysis and statements. Details of these election expenses were retrieved from the mobile phone of Vijay Kumar Gowda, who handled the cash as per Nagendra’s instructions, according to the ED.

Nagendra was also accused of obstructing the investigation by destroying mobile phones and instructing others to remain silent. The ED arrested Nagendra and five other key accused during the investigation.

The ED initiated an investigation based on FIRs registered by the Karnataka Police and the CBI, which uncovered that around Rs 89.62 crore was diverted from the accounts of the corporation’s accounts into fake accounts across Andhra Pradesh and Telangana and later laundered through shell entities. This alleged scam came to light after the suicide of Chandrashekhar, an employee of the corporation, in May 2024.