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BENGALURU: The Central Bureau of Investigation (CBI) filed a chargesheet in connection with misappropriation of funds of the Karnataka Maharishi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL) before the competent court here on Tuesday.
The CBI investigation has established the role of 30 persons, including former ST Welfare Minister B Nagendra, who allegedly received illegal gratification of Rs 1.20 crore, routed into bank accounts of his family members. He was also the beneficiary of a benami vehicle purchased using diverted funds of the ST Corporation.
“The CBI completed investigation and filed three separate chargesheets with regard to misappropriation of funds in three entities (KMVSTDCL, ST Welfare department and Karnataka German Technical Training Institute). Then minister B Nagendra figures as accused in all three chargesheets,” the central agency stated in a press release.
The case was registered based on a complaint lodged by Union Bank of India (UBI), naming three officials of UBI MG Road Branch, Bengaluru, and others. Investigation was monitored by the Karnataka High Court through regular status reports. During investigation, fraud committed on two other state government entities -- ST Welfare Department and KGTTI -- also came to light and were brought to the notice of the court, which on July 1, 2025, ordered that CBI expand the investigation to cover frauds involving these two entities as well.
The CBI probe unearthed a meticulously planned conspiracy involving Nagendra, his close associate Nekkanti Nagaraj and Padmanabha JG, MD of KMVSTDCL.
“Satyanarayana Varma of Hyderabad played a crucial role in executing the fraud. Varma had previously executed a similar fraud in Chhattisgarh. He conspired with one Etakari Satyanarayan, chairman of First Finance Credit Cooperative Society Ltd., Hyderabad, in opening 18 bogus bank accounts in the names of fictitious business entities using forged registration certificates and fabricated KYC documents.
The MD and Accounts Officer of KMVSTDCL shared specimen signatures and sensitive banking information with Varma through Nekkanti Nagaraj and other accused. Forged rubber seals/stamps of the MD and AO of KMVSTDCL were fabricated through a graphic designer in Hyderabad and used to execute fraudulent banking transactions. Approximately Rs 187crore were pooled into KMVSTDCL’s UBI account by the MD and AO.
A sum of Rs 89.63crore was fraudulently diverted through forged cheques and RTGS transactions and diverted funds were further layered through approximately 600 bank accounts and ultimately converted into cash, bullion and luxury vehicles for the benefit of the accused. UBI’s MG Road Branch officials actively facilitated these transactions in violation of banking norms. Nagendra is the beneficiary of the benami vehicle purchased using diverted funds of KMVSTDCL and the fraud amount was received by Nekkenti Nagaraj and his relatives,” the release stated.
In 2023-24, tenders worth Rs 13.95 crore for smart computer labs and roti making machines were awarded by the department to SKR Infrastructure, Bengaluru, a firm of K Srinivas Reddy who is closely connected to Nagaraj. Investigations established that Nagendra received illegal gratification of `1.20crore through Nagaraj, routed into the accounts of the minister’s sister, brother-in-law, personal assistant, and a farmhouse owner in Ballari. Nagaraj himself received Rs 5.72crore from SKR Infrastructure and its sister concerns, the CBI added.
Investigation also revealed that skill development training work worth `4.90crore was awarded by the SC/ST Nomadic Tribes Development Corporation to KGTTI, at the instance of the minister, and sub-contracted without any tender process to Sadguru Education Trust and Sadguru Solutions, which was further sub-contracted to Skillpoint Training & Services, Guntur. Investigation established that Rs 64lakh was paid as illegal gratification to Nagaraj’s family, and Rs 15.50lakh to Prakash N, section officer, ST Welfare secretariat.
