In a significant development that could have far-reaching implications, the Governor of Karnataka, Thawar Chand Gehlot, has permitted the Enforcement Directorate (ED) to prosecute former Minister B. Nagendra in connection with the notorious Karnataka Valmiki Development Corporation money laundering case. This decision has reignited scrutiny over Nagendra, a prominent political figure now facing severe legal challenges as he attempts to navigate his troubled political career.
Nagendra’s name has been prominently linked to allegations of corruption within the Karnataka Valmiki Development Corporation, prompting him to tender his resignation from his ministerial role on June 6, 2024. The allegations, which have swirled around him for some time, reached a crescendo when the ED took decisive action, resulting in his arrest and subsequent incarceration at Parappana Agrahara Jail. After securing bail, Nagendra expressed his ambitions to reclaim his ministerial position, buoyed by statements from Chief Minister Siddaramaiah, who hinted at Nagendra’s imminent reinstatement in the cabinet.
However, the tides have turned dramatically with the Governor’s recent authorization for prosecution against Nagendra. This legal sanction marks a troubling new chapter for the former minister, as he now finds himself back under the ED’s investigative lens, which has previously peeled back layers of his alleged involvement in this massive fraud.
The ED’s investigation has been thorough, culminating in an extensive chargesheet of 4,970 pages. This document details a staggering Rs 187 crore scam and outlines various illegal transactions, focusing on Rs 84 crore that Nagendra and his associates are accused of misappropriating. The chargesheet categorically labels Nagendra as “A1,” indicating his central role in orchestrating the illicit activities tied to the Valmiki Development Corporation.
Details of Valmiki scam
This scandal has rocked Karnataka after a clandestine meeting held at the prestigious Shangri-La Hotel in Bengaluru, where a massive fraud operation amounting to Rs 187 crore was allegedly plotted. This secretive gathering took place in December 2023. It involved key figures including former minister B. Nagendra’s personal assistant Devendrappa, close associate Nagaraj, Valmiki Corporation Managing Director Padmanabha, Andhra-based businessman Nageshwar Rao, and an official from Union Bank.
According to sources, the meeting was convened to devise a scheme for the illicit transfer of Rs 187 crore. During the proceedings, Nagaraj instructed Padmanabha, who was serving as the Managing Director of the Valmiki Corporation at the time, to open a new bank account with Union Bank. However, Padmanabha resisted, stating, “You can’t open an account like that, no way.”
Just when it seemed the plan might unravel at this critical juncture, former Minister Nagendra, who had been waiting outside in a car, was made aware of the resistance to opening the account. In a decisive move, he entered the hotel and personally instructed Padmanabha to proceed with the new account and make the necessary deposits. This pivotal moment began the fraudulent activities that would later be exposed.
Once the account was established following Nagendra’s intervention, the unscrupulous activities commenced almost immediately. Initially, the corporation had two accounts at the Vasanthnagar branch in Bengaluru, but a plan was hatched to transfer one account to the MG Road branch. Padmanabha allegedly executed these transfers without obtaining necessary government approvals.
A staggering Rs 187 crore was transferred to the new account from another bank, specifically from Treasury Hujur-2. This colossal sum of money was moved in one fell swoop, setting in motion a series of transactions designed to obscure the origins of the funds.
Of the Rs 187 crore, Rs 94 crore was directed to the First Bank of Hyderabad, distributed among a network of 18 fraudulent accounts. This operation was orchestrated under the guidance of Nagaraj and Nageshwar Rao, with an intermediary named Satyanarayana Verma facilitating the clearance of these transactions. The money was skillfully moved through various channels, including net banking, RTGS, Phone Pay, and Google Pay, enabling Satyanarayana Verma to withdraw funds, which he then shared with Nagaraj and Nageshwar Rao.
