The Enforcement Directorate on Wednesday launched simultaneous raids at the residences and offices of Congress MP from Ballari E. Tukaram and three Congress MLAs from the district in connection with the money laundering case linked to the multi-crore Valmiki corporation scam.
The ED sleuths carried out raids across eight locations in Bengaluru and Ballari under the PMLA and searched the residences of Tukaram and the MLAs - Nara Bharath Reddy (Ballari city), JN Ganesh (Kampli) and Dr NT Srinivas (Kudligi) to gather evidence of the alleged diversion of funds (Rs 187 crore) from the Karnataka Maharshi Valmiki Scheduled Tribe Development Corporation to the Bellary parliament constituency in the 2024 Lok Sabha elections.
AICC chief Mallikarjun Kharge said, "ED has hatred towards us. These raids are aimed at breaking the Congress party, but they will succeed in doing it. The raids based on allegations of misuse of funds are not new and mostly based on personal grudges and not on solid evidence."
Chief Minister Siddaramaiah, who, during a heated debate in the state Assembly last July, had admitted that Rs 89.6 crore had been siphoned off from the Corporation and not Rs 187 crore as alleged by the BJP, chose to play it safe this time.
“Let the ED do anything that is in accordance with the law. We don’t support any violation of law,” he said.
Incidentally, the ED, on Tuesday, attached 92 properties worth Rs 100 crore in connection with the Mysore Urban Development Authority (MUDA) scam case linked to the chief minister under the provisions of the Prevention of Money Laundering Act (PMLA) 2002.
The Valmiki corporation scam came to light in May 2025, after the accounts superintendent of the Corporation - Chandrasekharan P, died by suicide, leaving behind a note detailing corruption and involvement of several officials.
The state government assigned the probe to a Special Investigation Team (SIT) of the Criminal Investigation Department (CID) in May last year. On June 6, 2024, the ED registered an Enforcement Case Information Report, leading to then ST welfare minister B. Nagendra’s arrest (on July 12). The ED submitted a 127-page chargesheet to the court in September 2024.
The ED, in its chargesheet named B. Nagendra as the primary accused and mastermind behind the scam, allegedly orchestrating it with the help of 24 others, including key associates like Satyanarayana Varma, Etakari Satyanarayana, J.G. Padmanabha.
ED initiated an investigation based on FIRs registered by the Karnataka Police and CBI, which uncovered that around Rs. 89.62 Crore were diverted from the accounts of the corporation’s accounts into fake accounts across Andhra Pradesh and Telangana and later laundered through shell entities.
This scam came to light after the suicide of Chandrashekhar, an employee of the Corporation, in May 2024. Investigations revealed that under the influence of B. Nagendra, the account of the corporation was moved to the MG Road Branch without any proper authorisation, where Rs 187 crore, including Rs 43.33 Crore from the state treasury under the Ganga Kalyana Scheme, were deposited without following proper procedures and in violation of government guidelines. These funds were subsequently siphoned off through multiple shell accounts and converted into cash and bullion.
ED investigation also revealed that an amount of Rs 20.19 crore (Rs 200 per voter) of the diverted funds were used to bribe the voters in Ballari in the 2024 Lok Sabha election from the Bellary constituency, as well as for the personal expenses of B Nagendra. Evidence of these expenditures was discovered during search and seizure operations and corroborated by financial analysis and statements. Details of these election expenses were retrieved from the mobile phone of Vijay Kumar Gowda, who handled the cash on Nagendra's instructions.
B Nagendra, who resigned after the scam came to light, is also accused of obstructing the investigation by destroying mobile phones and instructing others to remain silent. ED arrested Nagendra (now out on bail) and five other key accused during the investigation.
Meanwhile, the SIT arrested two officials of the Corporation — former managing director J.B. Padmanabha and accountant Parushurama G. — for allegedly misappropriating funds, besides arresting one Satyanarayana Ittigeri for allegedly receiving Rs 92 crore in 18 different bank accounts and encashing it. SIT also seized 16 kg of gold and Rs 2.5 crore from two accused persons, including Satyanarayana Varma.
