Karnataka ministers bat for CM Siddaramaiah, claim BJP is using ED to frame CM in Rs 94 crore tribal welfare fund fraud case

The five ministers who are all considered to be close to CM Siddaramaiah said a conspiracy on the lines of the arrest of the Jharkhand and Delhi CMs using Central agencies was underway in Karnataka in the money laundering probe at the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited.

The ministers and a legal advisor to the CM stated on Thursday that the ED was attempting to create a narrative to suggest that funds that were stolen from the ST development corporation between March to May this year were used to fund the Congress in the Lok Sabha polls in Karnataka and state polls in Telangana.

The Congress ministers’ allegations against the ED came amid a BJP demand in the state legislature, and in protests outside, for the resignation of Karnataka CM Siddaramaiah over the Rs 94.73 crore ST development corporation fund fraud and an alleged scam in land allotments by the Mysore Urban Development Authority.

The team of ministers comprising Revenue Minister Krishna Byregowda, IT Minister Priyank Kharge, Health Minister Dinesh Gundu Rao, Labour Minister Santhosh Lad and Energy Minister K J George and the CM’s legal advisor said that a BJP conspiracy was afoot to topple the Congress government in Karnataka with the “standard operating procedures” of using the ED/IT/CBI.

“In the probe into the Maharshi Valmiki Scheduled Tribes Development Corporation fraud we have concrete information and evidence that during the probe the persons who are under investigation are being forced to give statements against people in top positions in the state government,” the revenue minister said.

“They are not trying to find the real culprits but are trying to frame people in the government,” he added.

“They are forcing people to name the CM, to say that the funds were used for polls in Andhra, in Ballari, to say the names of the deputy CM and ministers,” IT Minister Priyank Kharge said.

“The same methods that were used in Jharkhand and Delhi to weaken the Opposition governments are being used in Karnataka as well by the ED. They are calling witnesses and coercing them to give statements against people in the government in order to weaken the government,” Byregowda said.

“The Supreme Court has said while granting bail in the cases of the Jharkhand CM Hemant Soren and the Delhi CM Kejriwal that the ED’s actions are arbitrary and without justification. Even when there is no prima facie evidence, arrests are being made and the sanctity of investigations has been compromised…” he stated.

The ministers questioned the lack of money laundering investigations against BJP leaders in similar frauds that have occurred in BJP tenures.

“There is a Rs 46 crore scam in the Devaraj Urs Truck Terminal where a former BJP MLC and MP candidate has received Rs 3 crore. Why is the ED not probing this case? Is it not proceeds of crime as the ED claims when entering a probe? Where did the funds go?” Byregowda quipped.

“In the last 10 years, the CBI, ED, and IT have been used to topple multiple governments in Arunachal Pradesh (2014), Goa (2017), Manipur (2017), Uttarakhand (2016), Karnataka (2019), and Madhya Pradesh (2020). In Gujarat, our MLAs were bought and also in Assam – the agencies were used against Himanta Sarma, the current BJP CM, who is now regarded to be purer than the Ganga,” Priyank Kharge said.

“Since 2014, 444 MLAs have been bought with threats and coercion by the CBI/IT/ED… In the past, we have run minority governments. But now even if we have a majority government, the Central agencies are used to target leaders and destabilise the government,” Kharge said.

“There are ED/IT/CBI cases against BJP leaders themselves which do not see progress. There are cases against former Karnataka CM B S Yediyurappa… the probe against Janardhan Reddy has stopped. The case against Shivraj Singh Chouhan is stalled in the Vyapam scam,” he said.

“The ED has not come for investigation but has come with a wrong intent to fix Congress leaders. The ED has become a political wing of the BJP… We will not remain quiet if this continues. They are trying to create a situation of instability. We have no faith in the ED,” Health Minister Dinesh Gundu Rao said.

The ED should probe the money laundering involved in the electoral bonds, he added.

The legal advisor to the CM told the state legislature on Thursday that an effort was underway to defame the Congress government with allegations of usage of funds from the ST development corporation fund for polls.

“It is the politics of coercion. It is a matter of concern. They want to stop the probe in the case by the state SIT. They do not want the stolen money to be recovered. It should be a free and fair probe to unravel the truth. I condemn the efforts to taint the state CM through the probe,” the CM’s legal advisor A S Ponanna said.

Background of ST Development Corporation fund fraud case

An amount of Rs 94.73 crore of the Rs 187 crore from the state treasury deposited in Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited’s bank accounts in Bengaluru was stolen by diversion to 18 bank accounts of fake companies between March and May this year.

The ED has arrested B Nagendra, 52, a former minister for the welfare of scheduled tribes in the Congress government in Karnataka, for being one of the alleged recipients of funds from the Rs 94.73 crore ST Development Corporation fraud.

Congress MLA Basanagouda Daddal, who is the chairman of the ST Development Corporation, is also currently under the scanner of the ED.

Over 20 people have been linked to the fraud so far with 14 people arrested by the CID SIT. The accused include six officials of the Union Bank of India, two officials of the ST Development Corporation and eight private persons including close associates of ex-minister B Nagendra.

The ED has been quizzing the wife of Nagendra over the last couple of days.

The Karnataka SIT was still probing the roles of the minister and the chairman of the corporation when the ED began its money laundering probe against the duo and carried out searches for two days on their premises before they arrested Nagendra late on the night of July 12.

A CBI case has also been registered in the ST Development Corporation fraud case. The CBI is investigating the role of officials of the Union Bank of India in the diversion of funds.

Nekunti Nagaraj, 46, a close associate of Nagendra, who was also associated with former BJP leader B Sreeramulu, is alleged to have played the role of the intermediary between the minister and the corporation officials.

Karnataka CM’s stand

Karnataka Chief Minister Siddaramaiah, who is also the state finance minister, has stated that the fund transfers from the ST Development Corporation occurred without his knowledge.

“All fund releases from the treasury will not come to my notice. It is the authorities who carry out the release of funds. It does not come to my notice and I do not sign on it. The probe is still underway,” Siddaramaiah said last week following BJP claims that the moral responsibility for the scam vests with the finance minister.

“Will Union Finance Minister Nirmala Sitharaman resign for all bank frauds that occur in her tenure by taking moral responsibility? This has happened at the level of the bank. All finance ministers would have to resign over bank frauds (according to BJP demands),” he said.