Karnataka government creates SIT to probe Rs 94 crore fund misappropriation at ST corporation

The irregularities came to light after the May 26 suicide of an official of the development corporation, P Chandrashekaran, who was involved in the auditing of funds, alleging fraud in the usage of funds in a six-page death note.

While an unnatural death case was registered in Shivamogga district, a managing director of the corporation filed a complaint in Bengaluru accusing six officials of the Union Bank of India of being involved in the scam. The police have registered a case under several sections of the Indian Penal Code related to criminal breach of trust, cheating, forgery etc.

The SIT has been constituted to investigate the case of the death of the official and the fraud. It will be headed by senior IPS officer Manish Kharbikar, the additional director general of police for economic offences at the CID. Other officers in the team are Shivprakash Devaraju, deputy commissioner of police (traffic); Hariram Shankar, superintendent of police (state intelligence); and Raghavendra Hegade, superintendent of police (CID).

The government order states that all cases regarding the financial misappropriation in the Karnataka Maharshi Valmiki Scheduled Tribes’ Development Corporation will be probed by the SIT.

“The Special Investigation Team shall carry out a comprehensive investigation of the cases and financial affairs and other related affairs of the Karnataka Maharshi Valmiki Development Corporation, and submit the investigation report to the Government through the Director General and Inspector General of Defense, Bangalore at the earliest,” says the order.

On Saturday, two corporation officials, former MD J J Padmanabh and accounts officer Parashuram G Durugannavar, were taken into SIT custody.

The preliminary probe in the case has revealed that Rs 94.73 crore of government money was siphoned in just one day and transferred to nine fictitious accounts that were also created on the same day. The money was transferred to accounts in the Ratnakar Bank Limited (RBL) in Hyderabad.

The Opposition BJP has demanded the resignation of Youth Affairs, Sports and Scheduled Tribes Welfare Minister B Nagendra stating he was part of the conspiracy, an allegation he has denied. The BJP has threatened to launch a protest from June 6 if the government fails to sack Nagendra from the cabinet.