The Karnataka High Court has directed the Special Investigation Team (SIT), Enforcement Directorate (ED), and forensic science laboratories to provide certified copies of all documents and digital evidence collected during their respective probes into the multi-crore Valmiki Corporation scam to the Central Bureau of Investigation (CBI).
Justice M. Nagaprasanna passed the interim order on Tuesday while hearing an application filed by the CBI, which forms part of a broader writ petition seeking a court-monitored investigation into the alleged embezzlement of welfare funds meant for Scheduled Tribes.
The petition was filed by BJP MLAs Basangouda Patil Yatnal, Ramesh Jarkiholi, Arvind Limbavalli, and Kumar Bangarappa, who accused the SIT of shielding high-profile individuals allegedly involved in the scam.
In its latest status report, the CBI revealed that approximately ₹89.63 crore was siphoned off from the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation (Valmiki Corporation) and routed through nearly 700 bank accounts. The funds were allegedly laundered into cash, gold bullion, and luxury vehicles using forged financial instruments—suggesting a broader criminal conspiracy.
The CBI informed the court that despite multiple requests, it had not received crucial evidence from the SIT, ED, or forensic agencies. The agency sought judicial intervention to expedite the transfer of material needed to trace the financial trail and prosecute those responsible.
Justice Nagaprasanna also permitted the CBI to pursue fresh leads uncovered in its probe, including the alleged diversion of ₹95 lakh from the Karnataka German Technical Training Institute’s (KGTTI) Canara Bank account to accused Nekkanti Nagaraj, routed through intermediary accounts. Another ₹2.17 crore was reportedly misappropriated from the Scheduled Tribes Welfare Department’s funds via the Valmiki Corporation’s Bank of Baroda account and eventually ended up with Nagaraj.
“Since the prayer is for completion of investigation or taking the investigation to its logical conclusion by filing a final report before the concerned court, I deem it appropriate to grant the prayers that are sought by the CBI in the status report,” the bench observed.
The scam came to public attention in May 2023 after Valmiki Corporation accounts superintendent Chandrasekharan P died by suicide, leaving behind a note alleging widespread misappropriation of government funds. His death led to the formation of an SIT by the state government, while the ED initiated a parallel money laundering investigation.
The ED has already flagged that around ₹90 crore was illicitly transferred from the Corporation’s Union Bank of India account to unauthorised recipients.
The BJP leaders who filed the writ petition contended that the SIT was attempting to suppress the scam and avoid implicating politically influential individuals. They insisted that only a central agency like the CBI could conduct an impartial probe.
Their plea followed a November 2024 High Court decision rejecting a similar request by Union Bank of India for a CBI investigation, where the court ruled that Section 35A of the Banking Regulation Act could not be invoked to justify central agency involvement.
The case continues to unfold as the CBI deepens its probe with judicial backing.
