A special court here on Thursday extended by five days the Enforcement Directorate (ED) custody of former Karnataka Minister B Nagendra in connection with a money laundering probe linked to alleged irregularities in the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd.
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The Ballari Rural Congress MLA was today produced before the court as his ED custody ended today. He will now be in ED custody till July 22. The ED arrested Nagendra on July 12 in connection with the case after questioning him. Following allegations against him in connection with the scam, Nagendra, who was Scheduled Tribes Welfare Minister, tendered his resignation on June 6.
The ED had carried out searches earlier this month at several places, including at the premises of Nagendra, and ruling Congress MLA Basanagouda Daddal, who is Chairman of the Corporation. The agency covered around 20 locations in Karnataka, Andhra Pradesh, Telangana and Maharashtra as part of a case registered under the Prevention of Money Laundering Act (PMLA), the sources said.
The ED on Wednesday alleged that a "substantial" amount of funds "misappropriated" from the Corporation were used to procure liquor during the recently-concluded Lok Sabha elections apart from some highly-priced vehicles. The ED had in a statement alleged that the associates connected to the Nagendra were "implicated in fund diversion and cash management." Probe found, the agency claimed, that "about ₹90 crore were diverted to 18 fake accounts in Andhra Pradesh and Telangana (from the funds of the Valmiki Corporation).
{{/usCountry}}The ED on Wednesday alleged that a "substantial" amount of funds "misappropriated" from the Corporation were used to procure liquor during the recently-concluded Lok Sabha elections apart from some highly-priced vehicles. The ED had in a statement alleged that the associates connected to the Nagendra were "implicated in fund diversion and cash management." Probe found, the agency claimed, that "about ₹90 crore were diverted to 18 fake accounts in Andhra Pradesh and Telangana (from the funds of the Valmiki Corporation).
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The diverted funds were then layered through fake and shell accounts, with cash and bullion dispersed among the accused. The illegal money transfer issue, involving the Corporation, came to the fore, after its accounts superintendent, Chandrasekharan P killed himself on May 26. He left behind a note claiming unauthorised transfer of ₹187 crore belonging to the Corporation from its bank account; from that, ₹88.62 crore was illegally moved to various accounts allegedly belonging to "well-known" IT companies and a Hyderabad-based cooperative bank among others. The state government has constituted an SIT headed by Manish Kharbikar, Additional Director General of Police, Economic Offences, at the Criminal Investigation Department (CID), to conduct the probe.
The SIT had questioned Nagendra and Daddal earlier this month in connection with the case. Mumbai-headquartered Union Bank of India had also filed a complaint with the CBI in connection with embezzlement of money belonging to the Corporation involving its MG Road branch, following which the premier investigation agency had initiated a probe.