Bengaluru, 1 July

Karnataka High Court on Tuesday ordered a comprehensive probe by the Central Bureau of Investigation (CBI) into the alleged Valmiki Scheduled Tribes Development Corporation scam.

Previously, the CBI's role in the case was confined to examining limited irregularities.

However, the High Court has now directed a full-fledged investigation, requiring the state's Special Investigation Team (SIT) to transfer all case-related documents and evidence to the central agency.

The case involves serious allegations of embezzlement of funds earmarked for the welfare of tribal communities.

In June, the Enforcement Directorate (ED) carried out multiple raids under the Prevention of Money Laundering Act (PMLA) at locations associated with Congress MP E Tukaram from Ballari and three Karnataka MLAs.

The searches were part of a larger probe into the suspected diversion of funds by the Valmiki Corporation.

Investigators believe that substantial amounts were illicitly withdrawn from the Corporation's accounts and funnelled into bogus bank accounts, before being laundered through shell companies.

The ED has also alleged that a portion of the transferred funds was used in the Ballari constituency during the 2024 Lok Sabha elections.

The alleged scam emerged after corporation accounts superintendent Chandrasekharan P was found dead on 21 May, 2024. His suicide note alleged an unauthorised transfer of Rs 187 crore from the corporation, with Rs 88.62 crore illegally deposited into IT company accounts and a Hyderabad cooperative bank. Following the incident, two officials were suspended and Karnataka Tribal Welfare and Sports Minister Nagendra resigned, who was later arrested by the ED.

Founded in 2006, the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation was established to implement developmental schemes aimed at improving the socio-economic conditions of Scheduled Tribe communities in the state.