Karnataka ST Fund Misappropriation Case: CBI Registers Complaint Against Bank Officials, Government Servants

A case has been filed by the Central Bureau of Investigation (CBI) against several bank officials and government employees for misappropriating government funds from the Karnataka Maharshi Valmiki Scheduled Tribe Development Corporation, as per a report by The Indian Express.

Acting on a complaint from Union Bank of India, the Banking Securities Fraud unit of CBI in Bengaluru filed charges on 3 June against Suchismita Raul, the former branch head of MG Road branch, Deepa D, the former deputy branch head, V Krishnamurthy, the former credit officer, along with unidentified private individuals and public servants.

As of now the bank has suspended these three officials.

According to the complaint filed by the bank’s deputy general manager and regional head of Bengaluru east, Rs 89.63 crore of public funds were defrauded, of which Rs 5 crore has been recovered, leaving Rs 84.63 crore yet to be recovered.

The bank has also reported that the Karnataka Maharshi Valmiki Scheduled Tribe Development Corporation had not received any cheque book, passbook, or account statements, and that the transfers from the accounts were unauthorised, involving forged signatures, seals, and letterheads.

The complaint further mentioned that the beneficiaries of the fraudulent transfers were unknown to the bank, and no letters or advice for such transfers were issued.

The fraud was uncovered following the suicide of P Chandrashekaran, an auditor, on 26 May. In his six-page suicide note, he detailed the fraud and named those involved.

Earlier this week, the Karnataka government’s Special Investigation Team (SIT) arrested the former managing director of the corporation, J J Padmanabh, and accounts officer, Parashuram G Durugannavar.

On Monday (3 June), the SIT also arrested Satyanarayana, the chairman of First Finance Credit Co-Operative Society Limited in Hyderabad, suspecting his significant involvement in creating fictitious accounts.

Amid allegations implicating Youth Affairs, Sports and Scheduled Tribes Welfare Minister B Nagendra in the fraud, the minister denied involvement, stating that he never instructed anyone to transfer money to any account.