ED Files Prosecution Complaint in Karnataka ST Development Corporation Scam; MLA B. Nagendra Named as Mastermind
(Judicial Quest News Network)
The Directorate of Enforcement (ED) in Bengaluru has filed a Prosecution Complaint (PC) before the Hon’ble Special Court for MPs and MLAs in Bangalore regarding the Karnataka Maharishi Valmiki ST Development Corporation scam. The Court has acknowledged the PC, marking a significant step in the ongoing investigation.
B. Nagendra, a Member of the Legislative Assembly (MLA) and former Minister for Scheduled Tribal Affairs, has been identified as the primary accused and alleged mastermind behind the scheme. He is purported to have orchestrated the scam in collaboration with 24 other individuals, including notable associates such as Satyanarayana Varma, Etakari Satyanarayana, J.G. Padmanabha, Nageshwar Rao, Nekkenti Nagaraj, and Vijay Kumar Gowda.
The ED’s investigation was initiated based on FIRs lodged by the Karnataka Police and the CBI, which revealed that approximately Rs. 89.62 crore was diverted from the Corporation’s accounts into fraudulent accounts in Andhra Pradesh and Telangana. These funds were subsequently laundered through a network of shell companies. The scam was brought to public attention following the tragic suicide of Chandrashekhar, an employee of the Corporation, in May 2024.
Findings from the ED’s inquiry indicated that, under B. Nagendra’s influence, the Corporation’s bank account was moved to the MG Road Branch without appropriate authorization. Here, Rs. 187 crore—including Rs. 43.33 crore from the State Treasury allocated under the Ganga Kalyana Scheme—was deposited in violation of government protocols. These funds were then siphoned off via multiple shell accounts and converted into cash and bullion.
Moreover, the investigation uncovered that Rs. 20.19 crore of the diverted funds were utilized to finance a candidate in the 2024 Lok Sabha elections from the Bellary constituency, alongside personal expenses of B. Nagendra. Evidence of these transactions emerged during search and seizure operations and was further substantiated by financial analyses and witness statements. Details concerning these election-related expenditures were extracted from the mobile device of Vijay Kumar Gowda, who managed the cash on Nagendra’s directives.
Following the exposure of the scam, B. Nagendra resigned from his position and is also accused of obstructing the investigation by destroying evidence and instructing others to remain silent. The ED has arrested Nagendra along with five other key suspects as part of their investigation.
The inquiry is ongoing, with further developments anticipated as the ED continues to pursue the case.
