The Enforcement Directorate (ED) on Tuesday began searches at the residences of Congress MP E Tukaram, party MLAs Bharath Reddy, J N Ganesh and former minister B Nagendra in Ballari in connection with the alleged Rs 94.73 crore Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation scam which surfaced in May last year after an employee of the corporation died by suicide.
Last year, the ED had arrested Nagendra following his resignation over links to the scam. A special court later granted bail to him in the money laundering case related to the alleged diversion of Rs 94.73 crore of funds from the ST corporation, saying the ED had not shown evidence of him receiving and using the scam money.
The agency has alleged that Rs 20.19 crore of the diverted funds was used to support the election of Tukaram during the 2024 Lok Sabha polls from Ballari constituency, and for Nagendra’s personal expenses.
The ED searches are taking place in Ballari amid speculation that the Congress is keen on bringing Nagendra, an MLA belonging to the Valmiki Nayak ST community, back into the Cabinet on account of the lack of evidence against him in the probe by the state SIT.
The alleged scam surfaced on May 26, 2024, after an accounts officer in the corporation died by suicide after a portion of the Rs 187 crore deposited from the state treasury and other bank accounts into the corporation’s new account – at the MG Road branch of the Union Bank of India – disappeared.
The probe by a Special Investigation Team (SIT) in Karnataka has found that the funds from the ST corporation were allegedly siphoned off to 18 primary accounts in Telangana and Andhra Pradesh created by one Satyanarayana Verma, who was accused in a similar scam in Chhattisgarh in 2022, and his associates. The funds were allegedly routed to over 170 secondary accounts from where they were withdrawn.
The SIT has recovered almost the entire amount of funds allegedly diverted from the ST corporation from the accused, including luxury cars and jewellery bought by them.
The scam rocked the Karnataka legislature in July 2024 after Opposition parties sought Chief Minister Siddaramaiah’s resignation, saying he should take “moral responsibility” for the fraud.
Over 20 people have been linked to the fraud so far, and 14 have been arrested by the SIT. The accused include two officials of the ST corporation – MD Padmanabha G J and accounts officer Parashuram Dugganavar – and eight others, including close associates of Nagendra. The SIT did not name Nagendra as an accused in its chargesheet, indicating the lack of evidence.
