CBI Files Chargesheets Against Former Karnataka Minister, 29 Others in Valmiki Corporation Fraud Case

The Central Bureau of Investigation (CBI) has completed the investigation into the misappropriation of funds of Karnataka Maharishi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL) and filed the charge sheet on Tuesday before the competent court. This case was registered based on a written complaint lodged by Union Bank of India (UBI), naming three officials of UBI, M.G. Road Branch, Bengaluru, and unknown others. The investigation in the case was monitored by the High Court of Karnataka through regular status reports. During the investigation of the UBI complaint, fraud committed on two other state government entities, namely, the ST Welfare Department and the Karnataka German Technical Training Institute (KGTTI), has also

come to light, and the same was brought to the notice of the Hon’ble High Court of Karnataka. The High Court vide order dated 01.07.2025 expanded the scope of the CBI investigation to cover frauds involving these two entities as well.

What did the CBI find?

The CBI investigation has unearthed a meticulously planned conspiracy involving the then Minister of ST Welfare Department, B. Nagendra, his close associate Nekkanti Nagaraj and Padmnabha J.G. (MD, 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. (FFCCSL), 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 Account 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 ₹187 crores were pooled into KMVSTDCL's UBI account by the MD and AO. A sum of ₹89.63 crores was fraudulently diverted through forged cheques and RTGS transactions and the 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.Bank officials of UBI, M.G. Road Branch actively facilitated these transactions in violation of banking norms. Further, B. Nagendra, the then minister is the beneficiary of benami vehicle purchased using the diverted fund of KMVSTDCL and the fraud amount was received by his close associate Nekkenti Nagaraj and his relatives.Further, in 2023-24, tenders worth ₹13.95 crores for Smart Computer Labs and Roti Making Machines were awarded by the ST Welfare Department to M/s SKR Infrastructure, Bengaluru, a firm of K. Srinivas Reddy who is closely connected to Nekkanti Nagaraj. Investigation has established that B. Nagendra, Minister, received illegal gratification of ₹1.20 crores through Nagaraj, routed into the accounts of the Minister's sister, brother-in-law, Personal Assistant, and a farmhouse owner at Bellary. Nagaraj himself received ₹5.72 crores from SKR Infrastructure and its sister concerns.Investigation also revealed that, skill development training work worth ₹4.90 crores was awarded by the SC/ST Nomadic Tribes Development Corporation to KGTTI, Bengaluru, at the instance of the Minister, and sub-contracted without any tender process to M/s Sadguru Education Trust and M/s Sadguru Solutions which was further sub-contracted to M/s Skillpoint Training & Services, Guntur. Investigation has established that ₹64 lakhs was paid as illegal gratification to Nagaraj's family, and ₹15.50 lakhs was paid to Prakash N., Section Officer, ST Welfare Secretariat, as bribe. Adequate evidence was gathered to corroborate the conspiracy.The CBI investigation has established the role of 30 persons including the former Minister. B. Nagendra, his close associate Nekkanti Nagaraj, officials of KMVSTDCL, State government officials, Bank officials of UBI (M.G. Road Branch) and IOB (Kukatpally, Hyderabad), and various private individuals and middlemen. The CBI has completed the investigation and filed three separate charge sheets with regard to the misappropriation of funds in the above three entities. B. Nagendra, the then Minister of ST Welfare Department, figures as an accused in all the three chargesheets, reflecting the pervasive and central role he played across each strand of this criminal conspiracy