Valmiki Corporation 'scam': ED attaches assets of ex-Karnataka minister's associates

New Delhi, Aug 27 (PTI) Assets worth about Rs 5 crore of various accused, including two alleged aides of former Karnataka minister B Nagendra, have been attached under the anti-money laundering law as part of an investigation into the Valmiki Corporation scam case, the Enforcement Directorate said on Wednesday.

The properties, provisionally attached under the Prevention of Money Laundering Act (PMLA), include land and flats worth Rs 4.45 crore belonging to Nekkenti Nagaraj, Chandra Mohan, Golapalli Kishore Reddy and Etakeri Satyanarayana and bank deposits of Rs 50 lakh kept in First Finance Credit Cooperative Bank, the federal probe agency said in a statement.

Nagaraj has been identified as former tribal affairs minister Nagendra's personal assistant while Etakeri Satyanarayana has been termed as his "key associate" by the ED earlier.

Chandra Mohan is stated to be an alleged hawala operative and aide of another accused Satyanarayana Varma.

All the four, whose assets have been attached, have been named as an accused in the ED chargesheet filed in this case last year.

The money laundering case stems from a 2024 FIR of the Karnataka Police where it was alleged that Rs 89.63 crore was diverted from the accounts of the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL) to "fake accounts" across Andhra Pradesh and Telangana and later laundered through shell entities.

The corporation was established in 2006 with a primary focus on the socio-economic development of the Scheduled Tribe (ST) communities in Karnataka by running welfare schemes for them.

The alleged irregularities came to fore after accounts superintendent of the corporation, Chandrasekharan P, was found dead on May 26 last year. He wrote a suicide note alleging illegal transfer of money from the corporation to various bank accounts.

The ED said its probe found that a "significant" portion of these funds was used in the 2024 general elections.

Additionally, luxury vehicles, including a Lamborghini, were bought using proceeds from the scam, it claimed.

These facts were "corroborated" by the accommodation entry (hawala) providers, bullion traders, gift card traders and luxury car dealers, according to the agency .

Nagendra and five others allegedly linked to him were arrested by the ED in this case. The former minister later got bail.

An MLA from the Bellary rural seat, Nagendra had resigned from his ministership in the face of these allegations.

Nagendra had told the ED that J G Padmanabha, the managing director of the Valmiki Corporation under his ministry, "fraudulently" transferred funds of the corporation without his knowledge or approval from the board.

He denied any wrongdoing saying he did not benefit personally from the siphoned funds.

Padmanabha told the ED that he was acting on the orders of the higher officials, including Nagendra, and he had no real control over the fraudulent activities.

Nagendra was named as the accused no.1 apart from 24 others including his aides, linked persons and some companies by the ED in its chargesheet.

The agency said the account of the corporation was "transferred" to a new "fraudulently" opened account at MG Road branch of Union Bank of India in collusion with bank officials and subsequently funds from other accounts and the treasury were pooled into this account.

"An amount of Rs 89.63 crore was diverted from this fraudulently opened corporation account to 18 fake bank accounts opened with First Finance Credit Cooperative Bank Limited in Hyderabad, in connivance with the bank's chairman.

"The diverted funds were then layered through fictitious and shell accounts, with cash and bullion distributed among the accused," it said. PTI NES KVK KVK