Three persons including an Indian Civil Accounts Service (ICAS) officer has been arrested by the Karnataka Criminal Investigation Department (CID) in connection with a multi-crore fraud in utilization of Bangalore Development Authority (BDA) funds between 1999 and 2008.
The accused persons have been identified as ICAS officer Sandeep Dash, a member of accounts at the BDA from 1997 to 2005; MN Seshappa, retired Joint Controller (State Accounts Department) and member of accounts BDA from 2005 to 2008; and C Vasanth Kumar, a clerk in the BDA.
The CID officials said that the officials in the accounts department of the BDA illegally invested thousands of crores of public money in chit and mutual funds and personally profited from these investments.
A case was registered about the fraud in the Seshadripuram police station and the Wilson Garden police station. The Karnataka government transferred these cases to the CID for further investigation.
The investigation into the case has revealed that Dash first invested BDA money in chit funds in 1999. He opened temporary bank accounts at the Indian Overseas Bank without the permission of the BDA to do this. He gave oral instructions to the bank to transfer money from a BDA account to the temporary accounts and also to instruct the bank to release funds to mutual funds through pay orders and bankers cheques. “He invested Rs 2,202.9 crores in mutual funds with the help of some brokers. The investigation reveals that he invested Rs 5.54 crore in Coffee Board, Bangalore during his tenure. His wife Sharada Subramanyam was the Finance Director in the Coffee Board at the time,” an official CID statement said.
The CID police said that Dash was arrested on Monday in the case registered at the Seshadripuram police station regarding financial irregularities in the BDA. The CID found that the retired Joint Controller (State Accounts Department) MN Seshappa invested BDA money to the tune of Rs 567.55 crore in mutual funds. He opened two temporary bank accounts at the Indian Overseas Bank and one at Corporation Bank to transfer BDA money to chit and mutual fund entities. The investigation has revealed that Seshappa also illegally transferred Rs three crore to the Bangalore Metro Rail Corporation Ltd (BMRCL) and Rs 2.12 crore to the Karnataka Backward Class Department Building Construction Society. Seshappa was arrested on August 14. The BDA clerk Vasanth Kumar who is accused in both the fraud cases was arrested on August 6. The CID investigation has revealed that the Coffee Board and the Karnataka Backward Class Department Building Construction Society illegally invested money transferred from the BDA account to mutual funds.