Mysuru, 11 July

Chief Minister Siddaramaiah on Thursday said action will be taken and responsibilities will be fixed in connection with an alleged illegal money transfer scam involving a state-run Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation, once the Special Investigation Team (SIT) probing the case submits its report.

He also rejected the Opposition's demand for his resignation in connection with the scam. "Three investigations are going on -- one by CBI in connection with the involvement of the bank, second by ED and the third by SIT. The SIT is conducting the probe, let the probe report come out," Siddaramaiah told reporters here in response to a question.

Replying to a question about the Opposition demanding his resignation alleging that such a big scam wouldn't have happened without coming to his notice as he is also the finance minister, he said, "if that is the case, for what has happened in the bank in connection with the case, Nirmala Sitharaman (Union Finance Minister) should also resign then, also the Prime Minister. Will they give (resignation)? An investigation is going on, neither the preliminary nor final report has come, after filing of the chargesheet, the report will come."

Asked whether the embezzlement of funds did not come to his notice when money was released from the treasury, Siddaramaiah said, "Every time it won't come to me. The money will be released by officials. It won't come to my notice, nor will I sign for it. The investigation is not yet completed. Without an investigation being completed, how can things be said? You (media) ask things just because the BJP is alleging."

Once the SIT submits the report after a probe, action will be taken and responsibility will be fixed, he said, adding that "without a report being submitted, how can the responsibility be fixed?"

The ED has been carrying out searches since Wednesday, including at the premises of a former minister in the Siddaramaiah government, B Nagendra, and ruling Congress MLA Basanagouda Daddal, who is Chairman of the Corporation, official sources said.

The agency covered around 20 locations in Karnataka, Andhra Pradesh, Telangana and Maharashtra as part of the case registered under the Prevention of Money Laundering Act (PMLA), the sources said.

Meanwhile, Deputy Chief Minister DK Shivakumar in Bengaluru said, ED searches were not required as SIT has already conducted searches and have recovered certain money. "The CBI has the provision that, in case there are irregularities over a certain amount, they can look into it. There was no need for ED (to get involved). No one had given any complaint to ED....there is a system they can't take up just because anyone says something," he said. The government itself had handed over the probe to SIT. Investigations are on by them and they have served notices to some people in connection with a case, Shivakumar said.

Nagendra, who was minister, has voluntarily resigned to enable a free and fair probe. "We have cross examined, he has explained to us, he has not done any signature anywhere and is not involved. In accordance with the law probe was on, but in between that the ED has done searches now, let's see," he said.

Asked whether ED searches are politically motivated, the deputy chief minister said, "let them finish it (searches), we will talk later." The illegal money transfer issue, involving the Corporation, came to the fore after its accounts superintendent, Chandrasekharan P killed himself on 26 May.

He left behind a note claiming unauthorised transfer of Rs 187 crore belonging to the Corporation from its bank account; from that, Rs 88.62 crore was illegally moved to various accounts allegedly belonging to "well-known" IT companies and a Hyderabad-based cooperative bank among others.

Chandrasekharan has named the Corporation's now-suspended Managing Director JG Padmanabh, accounts officer Parashuram G Durugannavar, and Union Bank of India Chief Manager Suchismita Rawal in the note, while also stating that the "Minister" had issued oral orders for transferring the funds.

Following allegations against him in connection with the scam, Nagendra, who was Scheduled Tribes Welfare Minister, tendered his resignation on 6 June.

The State government has constituted an SIT headed by Manish Kharbikar, Additional Director General of Police, Economic Offences, at the Criminal Investigation Department (CID), to conduct the probe. SIT had questioned Nagendra and Daddal on Tuesday in connection with the case.

Mumbai-headquartered Union Bank of India had also lodged a complaint with the CBI in connection with embezzlement of money belonging to the Corporation involving its MG Road branch, following which the premier investigation agency had initiated a probe.