Karnataka Minister's Custody Extended Amid Money Laundering Probe

The ED custody of former Karnataka Minister B Nagendra has been extended by five days due to a money laundering investigation connected to the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd. Nagendra was arrested on July 12 and is alleged to be involved in misappropriation of funds amounting to crores.

A special court in Karnataka on Thursday extended the Enforcement Directorate (ED) custody of former minister B Nagendra by five days. This extension is related to an ongoing money laundering probe associated with the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd. Initially, Nagendra's custody was set to end today, but he will now remain with the ED until July 22.

The ED detained Nagendra on July 12 following allegations tied to a financial scandal involving the Corporation. This led to Nagendra resigning from his position as the Minister for Scheduled Tribes Welfare on June 6.

Earlier this month, the ED conducted searches at various locations connected to Nagendra and ruling Congress MLA Basanagouda Daddal, Chairman of the Corporation. Altogether, around 20 sites across Karnataka, Andhra Pradesh, Telangana, and Maharashtra were investigated under the Prevention of Money Laundering Act (PMLA).

In its statement, the ED claimed that a significant portion of the misappropriated funds had been utilized to procure liquor during the recent Lok Sabha elections, along with the purchase of high-end vehicles. The investigation unearthed that approximately Rs 90 crore had been diverted to 18 fake accounts in Andhra Pradesh and Telangana. These diverted funds were then distributed through shell and fake accounts, eventually being converted into cash and bullion.

The illegal fund transfers were heavily scrutinized following the suicide of Chandrasekharan P, accounts superintendent of the Corporation, on May 26. He left a note alleging the unauthorized transfer of Rs 187 crore, of which Rs 88.62 crore was illegally distributed among accounts linked to prominent IT firms and a Hyderabad-based cooperative bank.

In response, the state government formed a Special Investigation Team (SIT) led by Manish Kharbikar, Additional Director General of Police, Economic Offences, at the Criminal Investigation Department. The SIT had already interrogated Nagendra and Daddal earlier in the month. Concurrently, Mumbai-headquartered Union Bank of India lodged a complaint with the CBI, citing embezzlement from the Corporation's MG Road branch, prompting a separate investigation by the agency.