Bellary: The Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) have intensified their crackdown in the multi-crore Valmiki Development Corporation money laundering case, with search operations directly implicating former Karnataka Minister B. Nagendra. The agencies have unearthed a damning trail of financial irregularities that point toward large-scale misuse of funds meant for Scheduled Tribe welfare.
On Monday, coordinated raids were carried out at properties linked to Nagendra and 15 other locations spread across Karnataka and Andhra Pradesh. CBI teams also stormed the Bellary residences of businessman “Eg” Kumaraswamy and his son Govindaraju, a BJP member and known associate of Nagendra. Sources revealed that the searches targeted suspicious transactions involving Govindaraju and prime accused Nekkanti Nagaraj, closely connected to Nagendra.
A senior CBI official remarked, “The scale of siphoning in this case is shocking. Money meant for tribal welfare was diverted through shell companies and routed to accounts linked with Nagendra’s relatives and associates. The evidence collected so far is extremely incriminating.”
Suicide that exposed the scam
The scam came to light after Chandrashekhar P., a superintendent in the Valmiki Corporation accounts department, tragically died by suicide on May 26, 2024. His death note pointed to relentless pressure and irregularities in fund management. This triggered an SIT probe by the Karnataka government, later supplemented by ED investigations and now brought under the direct supervision of the CBI.
Nagendra, then Minister for Scheduled Tribes Welfare, resigned on June 6, 2024, amid mounting evidence. He was arrested by the ED in July that year and remained in custody for three months before securing bail. The CBI’s entry into the case—following High Court directions—has revived scrutiny on Nagendra’s role, adding to his mounting legal troubles.
Money trail points to Nagendra’s inner circle
Investigators revealed that between February 21 and May 6, 2024, over ₹84 crore was illegally siphoned from the Corporation’s account in Union Bank of India. ED officials earlier indicated that part of these funds were used during the Lok Sabha elections in Bellary.
Fresh documents examined by the CBI indicate misuse of government money from both the Scheduled Tribes Welfare Department and the Karnataka German Technical Training Institute (KGTTI). Disturbingly, Rs 1.20 crore was traced to bank accounts belonging to Nagendra’s sister, brother-in-law, and a close aide.
The CBI further uncovered that Rs 2.17 crore from the department’s account in Bank of Baroda was routed through intermediaries—SKR Infrastructure and Golden Establishment—into the accounts of Dhanalakshmi Enterprises, owned by Nekkanti Nagaraj. Another ₹64 lakh from KGTTI found its way to the accounts of Nagaraj’s brother and relative, raising questions about systemic collusion.
“It is no longer about negligence; this was deliberate misappropriation of tribal welfare funds. The documents clearly establish Nagendra’s complicity,” an investigating officer stated.
The High Court, acting on a petition by BJP MLA Basanagouda Patil Yatnal, handed over the probe to the CBI in July 2025. It also directed the state SIT to provide all case files and evidence to the central agency. Since then, the CBI has filed four status reports, each pointing to deeper irregularities.
Nagendra, despite being out on bail, remains the central figure in the scandal. Opposition parties have seized the moment, demanding accountability from the Congress leadership for allowing the misuse of welfare funds.
Local activists in Bellary have also expressed outrage. “This money was meant for education, housing, and livelihood of poor tribal families. Instead, it was looted by powerful politicians and their cronies,” said activist Suresh Nayak
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