Political turbulence has gripped Karnataka once again as Planning and Statistics Minister B. Nagendra stepped down from the state cabinet merely 25 days after assuming charge. His resignation comes in the wake of mounting pressure over alleged financial irregularities amounting to 89 crore rupees within the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation, a controversy that had fueled intense opposition attacks against the ruling administration. While refuting any involvement in the alleged corruption, Nagendra stated that he was prepared to relinquish his assembly membership if the situation demanded it. Notably, he had previously resigned over the same controversy in 2024, following which the Enforcement Directorate arrested him before he subsequently secured bail.
Chief Minister Defense and Opposition Reactions
Addressing the development, Chief Minister D.K. Shivakumar stated that Nagendra was deeply pained by the accusations leveled against him and maintained his innocence. Shivakumar added that he and his legal advisors had thoroughly reviewed the matter, confirming that the minister had no connection to the case and had done nothing wrong, choosing to step down in the interest of the party. Meanwhile, the opposition Bharatiya Janata Party hailed the resignation as a major milestone in their agitation against the corporation scandal. Leader of the Opposition in the Karnataka Legislative Assembly R. Ashok termed the resignation as the first wicket to fall in the Congress administration, while state BJP President B.Y. Vijayendra remarked that Nagendra was merely a small fish in the wider scandal involving major players.
Origins of the Valmiki Corporation Scandal
The Valmiki Corporation controversy centers around a massive financial fraud in Karnataka involving the unauthorized diversion and misappropriation of 89.63 crore rupees out of a total fund of 187 crore rupees allocated to the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation. This specific financial allocation was strictly designated for the welfare and developmental initiatives of tribal and Scheduled Tribe communities. Instead of reaching the intended beneficiaries, the funds were allegedly funneled through the accounts of hundreds of shell companies, information technology firms, and a cooperative credit society in a complex web of transactions.
Unraveling the Multi Crore Fraud
The scandal came to light when the corporation accounts superintendent and whistleblower, 52-year-old Chandrasekharan P., tragically died by suicide. Before taking the extreme step, he left behind a detailed suicide note detailing the intense pressure he faced from top management and senior officials to execute unauthorized and illegal money transfers without formal approval. Subsequent investigations revealed that approximately 88.62 crore rupees had been unlawfully transferred from the official account of the corporation held at the Union Bank of India to unauthorized accounts. These funds were distributed across 600 distinct accounts using fake cheques, RTGS transfers, and digital systems, including accounts belonging to a Hyderabad-based credit cooperative society, before being withdrawn as cash.
Involvement of Investigative Agencies
Following the revelations, a Special Investigation Team constituted by the state government, alongside central investigative agencies, joined the probe to uncover the full extent of the conspiracy. The Enforcement Directorate formally named the Congress leader and former tribal welfare minister B. Nagendra as the primary mastermind and conspirator behind the entire money laundering operation. Central agencies have been actively tracking the movement of approximately 20 crore rupees of the embezzled funds. Investigations suggest that portions of this money were routed through Karnataka and Hyderabad to influence and finance political elections.
Role of the Former Minister in the Conspiracy
Following comprehensive inquiries, the Enforcement Directorate officially designated the legislator and former Scheduled Tribe welfare minister as the principal accused in the multi-crore financial fraud. The agency stated that Nagendra orchestrated the entire scheme by leveraging his official influence to transfer the corporation bank account without authorization to a specific branch located on MG Road in Bengaluru. He is further accused of conspiring to misappropriate, layer, and divert approximately 89.63 crore rupees through his personal staff, close associates, and private business entities. According to agency documentation, around 20 crore rupees of the diverted funds were utilized to run political campaigns and mobilize resources during the 2024 Lok Sabha elections.
