New Delhi: The Enforcement Directorate (ED) on Friday said it has provisionally attached assets worth around Rs 8 crore belonging to former Karnataka minister and senior Congress leader B. Nagendra in connection with the alleged multi-crore Valmiki Development Corporation scam. The action has been taken under the provisions of the Prevention of Money Laundering Act (PMLA), marking a significant escalation in the central agency’s probe into the case.
According to the ED, the attached properties include four residential and commercial properties and one building, collectively valued at Rs 8.07 crore. The agency has termed these assets as “proceeds of crime” generated through the alleged illegal diversion of funds from the Karnataka Maharshi Valmiki Scheduled Tribes (ST) Development Corporation.
In an official statement, the ED said substantial amounts of money were siphoned from the Valmiki Development Corporation’s accounts and routed through a network of fake and shell accounts. The funds were allegedly misappropriated under the guise of welfare schemes intended to uplift the Scheduled Tribe communities. The agency noted that while assets worth Rs 8.07 crore have been identified and attached, the remaining proceeds of crime could not be traced so far.
“The remaining proceeds of crime may have been concealed, layered, or diverted through other means. It is suspected that the accused may have made alternative arrangements to hide or park the funds,” the ED said, indicating that further investigation is underway to trace the missing money trail.
The money laundering probe is based on FIRs registered earlier by the Karnataka Police and later taken up by the Central Bureau of Investigation (CBI). During the investigation, agencies uncovered alleged illegal transfers of crores of rupees from the Valmiki Development Corporation’s accounts to fake beneficiaries and shell entities.
These transfers reportedly violated the corporation’s established financial norms and procedures.
Investigators allege that funds earmarked for welfare schemes, skill development, and financial assistance to ST communities were instead diverted for personal and political gains. The scam has raised serious questions about oversight and accountability within government-run welfare corporations.
B. Nagendra, who held the portfolio of ST Welfare Minister in the Karnataka government, had come under scrutiny after the scam surfaced. He was arrested in connection with the case and subsequently remanded to judicial custody. After spending time in jail, Nagendra was later released on bail, though the investigation against him continues.
The ED’s attachment of assets is seen as a crucial step in securing alleged illicit gains and preventing their disposal during the pendency of the trial. Under the PMLA, the provisional attachment of properties is intended to prevent accused persons from benefiting from assets allegedly acquired through money laundering.
Sources said the ED is also examining the role of other individuals, including officials of the Valmiki Development Corporation, intermediaries, and beneficiaries of the alleged fake accounts. Financial records, bank statements, and digital evidence are being scrutinised to establish the full extent of the money trail.
