Karnataka Assembly Faces Disruptions as Opposition Protests Valmiki Corporation Scandal
The Karnataka legislature's ongoing Monsoon session has been marked by intense political confrontations, with the ruling Congress and the opposition parties staging counter-protests. The Bharatiya Janata Party (BJP) and its ally, the Janata Dal (Secular), have disrupted proceedings to demand the ouster of Cabinet Minister B. Nagendra over his alleged involvement in the multi-crore Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation (KMVSTDC) scandal.
In response, the ruling Congress party staged its own protest on Friday, accusing the opposition of deliberately derailing legislative debates on the severe drought affecting the state. The Congress alleged that the disruptions are a political strategy to shield the Union government from criticism regarding its delay in releasing drought mitigation funds to Karnataka.
Clashing Protests inside the Vidhana Soudha
During the protests inside the Vidhana Soudha, the state secretariat, BJP and JD(S) legislators wore black t-shirts printed with the slogan "Rs 187 crore looted by Nagendra." Leader of the Opposition R. Ashoka accused the Congress administration of trampling on the opposition's demands to protect a minister facing serious corruption charges. He stated that instead of addressing the multi-crore irregularities in the Valmiki Development Corporation, the government has chosen to shield Nagendra.
Meanwhile, B. K. Hariprasad, president of the Karnataka Pradesh Congress Committee (KPCC), defended the government's stance, stating that the ruling party is fully prepared to discuss the allegations on the floor of the House. Hariprasad characterized the opposition's disruptions as a conspiracy orchestrated by central BJP leaders to prevent the legislature from functioning and to avoid discussing the state's pending requests for central drought relief funds.
The Resignation and Re-induction of B. Nagendra
The controversy centers around B. Nagendra, who previously served as the Minister for Scheduled Tribes Welfare. He voluntarily resigned from his post in June 2024 following the initial exposure of the financial irregularities. Chief Minister Siddaramaiah subsequently admitted on the floor of the Assembly that financial misappropriation had occurred, though he stated the amount involved was Rs 89.6 crore, of which nearly Rs 80 crore has since been recovered by the government.
Despite the ongoing investigations, Nagendra was re-inducted into the cabinet led by D. K. Shivakumar on August 3, where he was assigned the Planning, Monitoring and Statistics portfolio. This re-induction provided the opposition with renewed leverage to target the Congress-led government since the Monsoon session commenced on August 13.
Origins of the Valmiki Corporation Scandal
The alleged scandal came to light following the death of P. Chandrashekaran, who worked as an accounts superintendent at the KMVSTDC. Chandrashekaran died by suicide on May 26, 2024, in the Shivamogga district. He left behind a six-page death note written in Kannada, which named senior corporation officials and Union Bank of India (UBI) officials, accusing them of embezzling funds meant for tribal welfare.
Following the revelation, multiple cases were registered by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED). Nagendra was arrested and spent approximately three months in jail before being granted bail. Investigators allege that the misappropriated funds were ultimately used to finance election campaigns.
CBI Findings and Fraud Mechanics
On February 2, the CBI announced the completion of its investigation and filed a charge sheet detailing a "meticulously planned conspiracy." The agency named Nagendra, his close associate Nekkanti Nagaraj, and Padmnabha J. G., the former chief of the Valmiki corporation, as key conspirators. Satyanarayana Varma of Hyderabad, who allegedly executed a similar fraud in Chhattisgarh, was also identified as a crucial figure in executing the scam.
According to the CBI, the conspirators used fabricated rubber seals and stamps of the corporation's Managing Director and Administrative Officer, created by a graphic designer in Hyderabad, to execute fraudulent banking transactions. A total of approximately Rs 187 crore was pooled into the corporation's Union Bank of India account. From this pool, Rs 89.63 crore was diverted using forged cheques and RTGS transactions. The diverted funds were layered through approximately 600 bank accounts and converted into cash, bullion, and luxury vehicles.
The CBI further established that during the 2023-24 financial year, tenders worth Rs 13.95 crore for smart computer labs and roti-making machines were awarded to SKR Infrastructure, a firm run by K. Srinivas Reddy, who is closely connected to Nekkanti Nagaraj. The investigation revealed that Nagendra received an illegal gratification of Rs 1.20 crore through Nagaraj, which was routed into the bank accounts of the minister's sister, brother-in-law, personal assistant, and a farmhouse owner in Bellary. Nagaraj himself allegedly received Rs 5.72 crore from SKR Infrastructure and its sister concerns. The CBI charge sheet has established the involvement of 30 individuals, including state officials, private middlemen, and bank employees.
