In a significant development in the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL) scam case, the Enforcement Directorate (ED) has provisionally attached assets worth over Rs 8 crore belonging to former Congress minister B Nagendra. The attached properties include residential and commercial land and buildings.
The Heart of the Allegations
The central probe agency's action stems from a money laundering investigation linked to an alleged fraud of Rs 89.63 crore from the state-run corporation. The ED initiated its probe based on cases filed by the Karnataka Police and the Central Bureau of Investigation (CBI). These cases were registered after a tragic incident on May 26, 2024, when an official of the KMVSTDCL died by suicide. The official's note alleged immense pressure from a minister to divert the corporation's funds.
According to the ED, Nagendra has been named as the mastermind behind the elaborate scam in its chargesheet. The agency alleges that the accused individuals illegally transferred money from the KMVSTDCL's account and misappropriated funds by forging valuable securities and documents.
How the Multi-Crore Scam Unfolded
The ED's investigation has pieced together a complex trail of financial deception. It was revealed that money from the corporation's account was first transferred to a fraudulently opened account at the MG Road branch of Union Bank of India. This was done in alleged collusion with bank officers.
Subsequently, funds from other accounts and the state treasury were pooled into this single account. From this pooled amount, a staggering Rs 89.63 crore was diverted to 18 fake bank accounts. These accounts were opened with the First Finance Credit Cooperative Bank Limited in Hyderabad, allegedly in connivance with the bank's chairman.
The agency further states that the diverted funds were then layered through a network of fictitious and shell accounts. Finally, the illicit money was distributed among the accused in the form of cash and bullion.
ED's Challenge and Legal Action
The ED has faced challenges in tracing all the proceeds of the crime allegedly generated by Nagendra. The agency stated that it appears the former minister had either exhausted or concealed the illicit funds. Due to this, the ED was constrained to attach assets equivalent in value to the alleged proceeds of crime.
This step, under the Prevention of Money Laundering Act (PMLA), was deemed necessary to prevent further legal proceedings from being frustrated. In a related action earlier, the ED's Bengaluru zone had attached assets worth Rs 4.94 crore belonging to other accused in the same case in August 2025.
The latest attachment of Nagendra's properties, valued at Rs 8.07 crore, marks a crucial step in the agency's efforts to recover the defrauded public money and bring accountability in the case that has shaken the state's administrative and political circles.
