In a recent development, the Central Bureau of Investigation (CBI) has initiated an inquiry into a substantial illicit fund transfer case involving the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd, as disclosed by Home Minister G Parameshwara on Wednesday. The decision on transferring the investigation to the CBI concerning state government departments associated with the case will be deliberated by the Cabinet upon receiving formal communication from the central agency.

Last week, the Union Bank of India, headquartered in Mumbai, formally lodged a complaint with the CBI regarding the misappropriation of public funds by the MG Road branch of the state-owned Corporation. Concurrently, it suspended three officials implicated in the matter. The Corporation, on its part, lodged a First Information Report (FIR) against senior Union Bank of India executives for the alleged misappropriation of Rs 88 crore.

Parameshwara elucidated, “As per a central government directive, if a bank fraud exceeding Rs three crore occurs, the CBI is empowered to initiate an inquiry. Acting upon the bank’s communication, the CBI has initiated proceedings.” Assuring full cooperation, the Minister asserted that the state government stands ready to assist the CBI in its investigation.

Regarding the extent of the CBI’s purview, Parameshwara remarked, “We are yet to ascertain whether the CBI can extend its investigation to include the Tribal Welfare Department (under which the Corporation operates) and the cooperative banks falling under the cooperative department, both of which are state government entities. The decision to grant full authority to the CBI hinges upon their formal request, subsequent to which the government will deliberate.” He added that the Cabinet will make a determination post the conclusion of the model code of conduct.

Addressing queries, Parameshwara stated, “If the funds have been reinstated into the Corporation’s accounts, the CBI will scrutinize the transaction, given its implications on the bank’s financial dealings.” Furthermore, he acknowledged the possibility of the CBI subjecting the Minister responsible for Scheduled Tribes Welfare, B Nagendra, to inquiry, emphasizing uncertainty regarding the agency’s mandate.

The illicit fund transfer saga unfolded following the tragic demise of Chandrashekhar P, the accounts superintendent at the Corporation, who committed suicide on May 26, leaving behind a revealing suicide note. The note detailed an unauthorized transfer of Rs 187 crore from the Corporation’s bank account, of which Rs 88.62 crore found its way into various accounts allegedly associated with prominent IT firms and a cooperative bank based in Hyderabad.

Chandrashekhar implicated the Corporation’s suspended Managing Director, J G Padmanabh, accounts officer Parashuram G Durugannavar, and Union Bank of India Chief Manager Suchismita Rawal in his note. He also indicated that the “Minister” had orally instructed the fund transfers. Subsequently, the state government constituted a Special Investigation Team (SIT), headed by Manish Kharbikar, Additional Director General of Police, Economic Offences, at the Criminal Investigation Department (CID) in Bengaluru, to spearhead the inquiry. Meanwhile, the opposition BJP has demanded Nagendra’s removal over his alleged involvement in the case and advocated for a CBI investigation.