A special court in Bengaluru has extended the Enforcement Directorate (ED) custody of former Karnataka Minister B. Nagendra by five days in connection with a money laundering investigation related to alleged irregularities in the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd.
Nagendra, who is a Ballari Rural Congress MLA, was presented before the court on Thursday as his initial ED custody period came to an end. The court has now extended his custody until July 22. The former Scheduled Tribes Welfare Minister was arrested by the ED on July 12 following questioning in connection with the case.
The investigation into the scam has been extensive, with the ED conducting searches at several locations earlier this month, including the premises of Nagendra and ruling Congress MLA Basanagouda Daddal, who is the Chairman of the Valmiki Corporation. The ED’s operations covered around 20 locations across Karnataka, Andhra Pradesh, Telangana, and Maharashtra, as part of its probe under the Prevention of Money Laundering Act (PMLA).
On Wednesday, the ED accused Nagendra of misappropriating a “substantial” amount of funds from the Corporation, which were allegedly used to procure liquor during the recent Lok Sabha elections and purchase high-priced vehicles. The agency claimed that associates linked to Nagendra were involved in fund diversion and cash management. The probe revealed that approximately ₹90 crore was diverted to 18 fake accounts in Andhra Pradesh and Telangana. These funds were layered through fake and shell accounts, with cash and bullion distributed among the accused.
The illegal financial activities surfaced after the Corporation’s accounts superintendent, Chandrasekharan P, committed suicide on May 26. In his note, Chandrasekharan alleged that ₹187 crore was unauthorizedly transferred from the Corporation’s bank account, with ₹88.62 crore moved to various accounts allegedly connected to prominent IT companies and a Hyderabad-based cooperative bank.
In response to the scandal, the state government has formed a Special Investigation Team (SIT) led by Manish Kharbikar, Additional Director General of Police, Economic Offences, at the Criminal Investigation Department (CID). The SIT has already questioned both Nagendra and Daddal earlier this month. Additionally, the Mumbai-headquartered Union Bank of India has filed a complaint with the CBI concerning the embezzlement of funds from the Corporation’s MG Road branch, prompting the premier investigation agency to launch its own probe.
Sources By Agencies
