Major Financial Fraud Uncovered at KIADB Ballari Zonal Office
A significant financial scandal involving nearly Rs 16.2 crore has been exposed at the Karnataka Industrial Areas Development Board (KIADB) zonal office located in the Mundargi Industrial Area of Ballari district. The Ballari police officially registered a First Information Report (FIR) on March 19, 2026, following a detailed complaint filed by the executive engineer of the zone, S M Kolalagi Mallappa.
Systematic Diversion of Government Funds
According to the official complaint, the fraudulent activities were carried out systematically over an extended period, from October 15, 2022, to February 20, 2026. The financial irregularities came to light on March 11, 2026, when Executive Engineer Mallappa conducted a thorough verification of bank transaction statements from KIADB's official account held with the Union Bank of India at the KKRTC Terminal Branch.
The investigation revealed that substantial sums of money had been illegally transferred to multiple private bank accounts without proper authorization. A preliminary scrutiny of the case indicates that the transactions were executed using cheques bearing forged signatures of KIADB officials, raising serious questions about internal security protocols and financial oversight.
Prime Accused and Modus Operandi
The FIR has identified Santhosh Kumar H V as the primary accused in this elaborate financial scam. Santhosh Kumar, who was entrusted with handling bank-related work for the KIADB zonal office, allegedly misused his position to orchestrate the fraud. He is accused of misappropriating cheque books and forging the signatures of both serving and former KIADB officials to facilitate unauthorized withdrawals.
The forged signatures included those of officials such as J H Sridhar, S Janardhan Nayak, and the complainant himself, Executive Engineer Mallappa. Investigators have determined that at least 16 cheques were used fraudulently in this scheme, with cheque leaves that had been issued earlier being misappropriated for illegal transactions.
Additional Accused and Bank Involvement
The complaint also names several other individuals allegedly involved in the financial irregularities. Retired KIADB employee Nazeer Ahmed has been implicated for his role in handling bank transactions during the period in question. Furthermore, private individuals Shruthi K T., Baby Ayisha, Rakesh Badagal, and Vijayalakshmi have been named as accused, with investigations suggesting their bank accounts were used to receive the diverted funds.
In a significant development, the FIR also mentions the bank manager and staff of Union Bank of India, alleging possible collusion or negligence in facilitating the fraudulent transactions. This raises concerns about the bank's due diligence processes, especially since alerts were reportedly sent to the bank in October of the previous year to stop payments on certain suspicious cheques—yet the fund diversions continued unabated.
Official Confirmation and Investigation Status
Confirming the registration of the case, Superintendent of Police Dr. Suman D Pennekar stated that the executive engineer of KIADB Ballari zone had formally lodged the complaint at the APMC police station. Dr. Pennekar elaborated that the accused individuals allegedly forged signatures, misused official seals, and presented cheques as genuine documents to withdraw funds, resulting in a significant financial loss to the government agency.
The police investigation is now focused on uncovering the full extent of the fraud, identifying all parties involved, and recovering the misappropriated funds. This case highlights critical vulnerabilities in financial management systems within government development boards and underscores the need for enhanced oversight and security measures to prevent such large-scale irregularities in the future.
