BENGALURU: The Criminal Investigation Department (CID) on Monday arrested Sandeep Dash, former member (Finance) at Bangalore Development Authority, for allegedly causing huge losses to the BDA.
The Indian Civil Accounts Service (ICAS) officer, who is currently posted in Mizoram is accused of investing funds of both the BDA as well as Bangalore Metro Rail Corporation in mutual funds instead of banks.
Sandeep who was with the BDA from 1997 to 2005 had invested Rs 2,202 crore of additional funds of BDA in mutual funds. He had opened temporary accounts in Indian Overseas Bank without bringing it into the notice of the authority, according to CID officers who are investigating the case.
Not only is investing elsewhere without informing the authority a problem, Sandeep was rolling the money from these mutual funds by using it to peg other losses of the BDA.
During the investigation, the CID team noticed that Rs 2,202 crore from BDA’s account was invested in mutual funds. Rs 5.54 crore was also transferred to the coffee board where his wife, Sharada Subramanyam was Finance Director. She is an Indian Accounts and Audit Services (IA&AS) officer.
On August 14, M N Sheshappa, who succeeded Sandeep was also arrested by the police for continuing Sandeep’s modus operandi. Two unauthorised temporary accounts in Indian Overseas Bank and one in Corporation bank were opened. He later transferred Rs 567.55 crore and the money was invested in mutual funds. During his tenure, Rs 3 crore to Bengaluru Metro Rail Corporation and Rs 2.12 crore to Karnataka Backward Class Department’s Building Construction Society was transferred without mentioning it on records.
Cashier C Vasanth Kumar who was also involved in the scam had kept the issue under wraps for more than nine years. He was also arrested on August 6.
In 2014, the issue was taken up at a board meeting with BDA chairman, S K Pattanayak, and commissioner, T Sham Bhat, who decided to get an audit done by the Karnataka Institute for Public Auditors (KPA), a forum comprising retired government auditors as members.
On August 6 Vasanth was arrested by the police. KPA went through BDA’s accounts from 1997 to 2014. It found that Dash and cashier Vasanth Kumar had diverted funds from BDA’s main account to mutual funds of Birla Sun Life through agents. However, they allegedly showed this as fixed deposits made with banks at an interest of 8.5 per cent. Mutual funds did exceedingly well in this period and earned profits of over 8.5 per cent. A police complaint was registered in Sheshadripuram police station and later it was handed over CID.
Speaking to Express, BDA Commissioner T Sham Bhat said that he came to know through media about the arrest of Sandeep Dash on Monday. Giving his version of the cases pertaining to the involvement of Dash, he said that Sandeep Dash had “invested funds of both the BDA as well as Metro in mutual funds instead of banks.”
“When he worked in Namma Metro, he had invested funds to the tune of Rs 3 crore in mutual funds. When the matter came to light, he transferred money from the BDA to Metro to make up for it. When this transaction was noticed by us, the matter came out,” he said.
Superintendent of Police, CID, Kumarswamy told Express, “Sandeep will be produced before court on Tuesday. Sandeep’s wife will also be called for an inquiry.”