A Karnataka minister from the Siddaramaiah-led cabinet, B Nagendra, resigned on Thursday after being linked to the multi-crore misappropriation scam that came to light after the suicide of a government official, P Chandrashekharan, last month. The deceased left a six-page note indirectly implicating the minister in the unexpected diversion of funds.
In a one-line resignation letter addressed to the chief minister, Nagendra said: “I voluntarily resign from my post.”
The Chief Minister is expected to send a letter advising the Karnataka governor to accept Nagendra’s resignation.
It is learned that chief minister Siddaramaiah and his deputy DK Shivakumar held a four-hour meeting with the minister. Since the case was investigated by the CBI, they decided that Nagendra should resign and wait for the investigation to be completed.
“From day one, he has said that he is innocent. Let him get a clean chit, and he can return to the ministry. Now, it is in the best interest of the party to face the investigation,” said a senior Congress leader requesting anonymity.
The ruling Congress in Karnataka is under pressure from the opposition BJP, which has been demanding Nagendra’s resignation since the incident took place on May 28. It also asked the governor Thawar Chand Gehlot, demanding the resignation of the minister. A delegation led by BJP state president BY Vijayendra and leader of the opposition in the assembly R Ashoka called it a “huge corruption scam in the state, where money saved for the development of ST communities has been illegally transferred to more than eighteen fake bank accounts in Hyderabad”.
“None of these monetary transactions can take place without the approval of the finance department, and the minister is involved,” said Vijayendra.
Allegations made by Chandrashekharan that the funds were allegedly embezzled from the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation to another bank account at the Union Bank of India, MG Road office, on “verbal instructions from ministers and senior bank officials” led to this resignation.
Mumbai-headquartered Union Bank of India later filed a formal complaint with the CBI regarding money laundering. Six senior officials of the bank were also suspended, along with Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation (KMVSTDCL) managing director JG Padmanabha and account officer Parashuram G. Nagendra, the Scheduled Tribe welfare minister who oversees the company.
Karnataka Home Minister Dr G Parameshwara had earlier said that the CBI has conducted an investigation based on the bank’s complaint, and a special investigation team formed by the Congress government, and headed by the additional director general of police (economic offences), in the Criminal Investigation Department (CID), Manish Kharbikar, is also conducting investigations in parallel.
Opposing the BJP, deputy CM Shivakumar said that he, along with the CM and Nagendra, had a detailed discussion, and the minister assured that he was not involved.
“For the sake of the party and the government…he does not want to embarrass the party; he himself has offered to resign from the post of minister,” said Shivakumar.
It all started when Rs 86.62 crore was allegedly siphoned from the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation to another bank account. Chandrashekharan had earlier worked at Bhadravati-based Mysore Paper Mills (MPM) before joining the board as superintendent at KMVSTDCL in Bengaluru.
Nagendra headed the tribal welfare ministry associated with the company.
The notes found next to the deceased were held by seniors in the company and the head manager of the bank responsible for the death. In the note, Chandrashekharan said as per the official’s instructions, he was directed to open “sweep-in and sweep-out accounts” that allow customers to transfer funds between savings and current accounts and link fixed deposit accounts with Union Bank. , Jalan MG Branch.
It is said that the company had total funds of Rs 187.3 crore in various accounts, of which Rs 86.62 crore was allegedly siphoned off and transferred to other accounts, including a prominent IT company and a Hyderabad-based cooperative bank.
On May 28, two days after Chandrashekharan committed suicide, the chief manager of Valmiki’s company, A. Rajashekhar, lodged a complaint with the High Grounds police. In his complaint, he alleged that funds of Rs 94 crore had been illegally diverted from the company’s official account, causing financial loss.
“Rs 187.3 crore was transferred to the account at the MG Road branch between March and May this year by different banks and the state treasury. At that time, the code of conduct (for the Lok Sabha polls) came into force, and there was no communication between the company officials and bank… Meanwhile we found that Rs 94.7 crore was transferred from MG Road branch to different accounts. We, the company officials, never received the information about the transfer. We found that the signatures of the company officials were forged before doing so transaction,” the complaint said.
Rajashekhar added that when Chandrashekaran’s “staff died of suicide”, he wrote to the bank’s CEO on May 23 about the fraud.
“Immediately, Rs 5 crore was deposited in our account. Therefore, the bank stopped cooperating with us,” the complaint said.
The complaint letter identified the MD and CEO of Union Bank of India, A Manimekhalai, as the prime suspect and also named executive directors Nitesh Ranjan, Ramasubramanyam, Sanjay Rudra, and Pankaj Dwivedi, and the bank’s MG Road branch chief manager, Shuchishita Raul, as accused. .
A government order was also issued on the matter, stating that “an anonymous person withdrew money from the bank account from March 5, 2024, to May 23, 2024, but the official did not pay attention and therefore he was not directly responsible for the transfer of funds to an unknown account. Although the official came to know about the transfer of Rs 86.62 crore to 14 anonymous accounts by forging the documents, on May 22, he did not inform the government until the report was sought on May 27.
Given the gravity of the matter, the Karnataka government set up an SIT on May 31.
Five arrests have been made by the SIT based on the investigation, including Sathyanarayana, chairman of the Hyderabad-based cooperative, JG Padmanabha, managing director of Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd, Parashuram Durugannanavar, the company’s accounts officer, and Ballari-based Nekkunti Nagaraj and his father-in-law Nageshwar Rao. Nagaraj and Nageshwar are known to be close to minister Nagendra.
