A special court in Bengaluru on Monday granted bail to former Karnataka minister and Congress leader B Nagendra in a money laundering case involving alleged misappropriation of funds within the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited. Judge Santosh Gajanan Bhat approved the bail petition 93 days after Nagendra’s arrest by the Enforcement Directorate (ED).
Nagendra was taken into custody under the Prevention of Money Laundering Act (PMLA) after the ED initiated an investigation based on allegations of financial misconduct. The case came to light in May when an official of the Valmiki corporation, died by suicide, leaving behind a note alleging misappropriation of welfare funds.
Following the incident, the Karnataka government formed a special investigation team (SIT) to look into the allegations while the ED launched its own inquiry. The ED reported that around ₹90 crore was illegally transferred from the Valmiki corporation’s account to unauthorised accounts.
In June, Nagendra resigned as the Scheduled Tribes Welfare Minister amid growing allegations of his involvement in the Valmiki corporation scam. The ED indicated that Nagendra is the primary accused and the alleged mastermind behind the operation, allegedly orchestrating it with the help of 24 others.
The investigation led to the arrest of Nagendra and five other key suspects. The ED stated, “Under the influence of Nagendra, the account of the corporation was moved to the MG Road Branch without any proper authorisation, where ₹187 crore, including ₹43.33 crore from the State Treasury under the ‘Ganga Kalyana Scheme,’ were deposited without following proper procedures and in violation of government guidelines.”
{{/usCountry}}The investigation led to the arrest of Nagendra and five other key suspects. The ED stated, “Under the influence of Nagendra, the account of the corporation was moved to the MG Road Branch without any proper authorisation, where ₹187 crore, including ₹43.33 crore from the State Treasury under the ‘Ganga Kalyana Scheme,’ were deposited without following proper procedures and in violation of government guidelines.”
{{/usCountry}}Additionally, the agency revealed that the diverted funds were siphoned off through various shell accounts, ultimately being converted into cash and bullion. The ED’s findings also claimed that “an amount of ₹20.19 crore of the diverted funds was used to support a candidate contesting the 2024 Lok Sabha election from the Bellary constituency, as well as for the personal expenses of B Nagendra.”