Valmiki scam: B Nagendra sent to jail for 14 days

The Ex-Congress minister will move bail on Tuesday (July 23).

Bengaluru: A special court on Monday sent former Congress minister B Nagendra arrested in the alleged multi-crore scam at the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation to judicial custody for 14 days. Nagendra will remain in jail till August 4.

The Congress MLA was produced before the Special Court for MPs/MLAs in the morning after his extended custody with the Enforcement Directorate (ED) ended. The Central agency did not seek a further extension and the sombre-looking former minister was escorted to the Parappana Agrahara Central Jail under tight security.

Nagendra was arrested on July 12 under the provisions of the Prevention of Money Laundering Act (PMLA), following a search operation by the ED on 23 premises in four states.

During the hearing, Special Public Prosecutor (SPP) P Prasanna Kumar appearing for the ED moved a body warrant for Satyanarayana Varma, the Chairman of First Finance Credit Co-Operative Society Limited based in Hyderabad in Telangana. The court passed an order directing Varma to be produced on Tuesday.

Varma was earlier arrested in connection with the scam by the Special Investigation Team (SIT) of the Karnataka police formed by the state government and was later sent to judicial custody. A parallel probe by the Central Bureau of Investigation (CBI) was also on. 

DH had previously reported quoting a top police source that the misappropriated sum from the corporation was transferred from the Union Bank of India’s MG Road branch to 18 bank accounts of First Finance. “At the second level, the money was further transferred from the 18 accounts to the 197 accounts,” the source had said.

In a subsequent statement, the ED had said: “ED investigation revealed that approximately Rs 90 crore were diverted to 18 fake accounts in Andhra Pradesh and Telangana.

“The diverted funds were then layered through fake and shell accounts, with cash and bullion dispersed among the accused. Additionally, high-end vehicles, including a Lamborghini, were purchased using proceeds from the scam.”

During the last hearing, the ED had told the court that they were verifying some properties purchased recently by Nagendra.

The SPP also informed the court of the ED’s findings that a substantial amount of the misappropriated sum was used to purchase large quantities of liquor just before the recent Lok Sabha polls. The funds were wired to a company in Hyderabad, the court was told, which supplied the liquor in March 2024.

The Central agency also found that part of the funds were used in printing guarantee cards distributed during the poll campaigning.

The alleged misappropriation of Rs 89.62 crore belonging to the corporation came to the fore after accounts superintendent Chandrashekhar died by suicide on May 26 at his Shivamogga residence.

To move bail

Well-placed sources confirmed to DH that the counsel for Nagendra will move an application for bail on Tuesday (July 23).

It will be scrutinised first before the prosecution decides to file an objection, the source added.