What is Valmiki corpn ‘scam’ that put 8 bank executives under lens
FIR was registered against eight officials of the Union Bank of India. No arrests have been made so far.
Bengaluru On May 19, an accounts superintendent with the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation (KMVSTDC) travelled 300 kilometres from Bengaluru, where he worked every day, to Shivamogga, which was home. At 5 pm two days later, when his family returned from an afternoon out, he was found dead in the room.
The police arrived, and as they began investigating, they found a book near a television table which contained within it a purported suicide note; a note which detailed the alleged pressure he faced to facilitate the unauthorised transfer of transactions from the department’s accounts under “oral instructions” from a “minister’s office”; a note that has led to the unravelling of an alleged scam that saw fraudulent transactions worth ₹94.73 crore.
On Thursday, four days after he killed himself and blew the whistle, launching a political furore in the state, the Karnataka Police registered a criminal case under Indian Penal Code (IPC) sections 409 (criminal breach of trust by public servants, bankers, etc), 420 (cheating), 467 (forgery), 468 (forgery for the purpose of cheating), 471 (fraudulently or dishonestly using as genuine any document which he knows or has reason to believe to be a forged document), and 149 (unlawful assembly with a common object) against eight officials of the Union Bank of India. No arrests have been made so far.
The Preliminary Investigations
Senior police officers investigating the case said that the six-page note that they recovered from the accounts superintendent’s home said that he was killing himself, and named three senior officials for the pressure that led to the step—two members of the senior management of the KMVSTDC, and the bank manager of the MG Road branch of the Union Bank of India.
The note details that in March 2024, he was directed by his seniors to write a letter that sought the transfer of funds from the department’s bank accounts at Union Bank of India’s Vasanth Nagar branch to the MG road branch. He named several specific transactions: ₹25 crore on March 4, ₹25 crore on March 6, ₹44 crore on March 21, and from the state treasury, ₹43.33 crore and ₹50 crore on May 21, 2024.
Senior police officers said that the note details pressure from the KMVSTDC’s senior management to execute these transfers, despite some resistance from one bank manager who insisted on authorised personnel being present at the time. On May 21 then, the MD of the KMVSTDC then directed the accountant to write a cheque of ₹50 crore, and “confidentially” withdraw the amount from the MG Road bank account.
The accounts superintendent said in his note that when he went to the bank on May 21 to execute this transactions, he met resistance from the bank manager who insisted that either authorised personnel be present for the withdrawal of such a large amount, or a letter in writing be handed over. The note alleges that he spoke to the MD of the corporation on the phone, and in turn told the bank manager that he would return the next day with a letter. By the next day however, the note alleged, the amount had been withdrawn, and its records showed signatures of MD and the accounts superintendent.
The note says that after this episode, they filed a complaint with the regional head of the Union Bank of India G Mahesh, but the MD of the corporation allegedly spoke to “staff” of “the minister”, who assured them that they would take correctional action, and later claimed that ₹5 crore was returned. “It appears that around ₹80 crore to ₹85 crore grants of ST Welfare have been swindled illegally,” the note said.
On Wednesday, as accounts superintendent’s suicide gained political attention, the corporation’s general manager R Rajshekar complained to the High Grounds Police on Wednesday, alleging fraudulent transactions by bank officials. A first information report (FIR) was then registered against the Union Bank of India’s MD and CEO, A Manimekhalai, and seven other employees of the bank.
THE POLICE FIR
In the complaint filed on May 28, based on which the FIR was registered, A Rajashekar, the General Manager of the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation (KMVSTDC) alleged “severe fraudulent activities” involving the top management of the Union Bank of India, MG Road branch and other third parties which have caused “substantial financial and reputational damage.”
According to the FIR, the KMVSTDC’s account was transferred to the Union Bank of India’s MG Road branch from Vasanth Nagar on February 21. “On February 26, 2024, bank officials obtained signatures from the corporation’s Managing Director and account officers to manage the account,” the FIR reads.
The FIR says that between March 4 and May 21, 2021, various sums totaling ₹185.33 crore was credited to the corporations MG Road account from different banks and the state treasury. “On May 22, 2024, corporation officials visited the bank to request chequebooks, passbooks, and records related to the corporation’s account. The bank claimed these documents had been sent to the corporation’s address, which was false. Bank officials forged signatures on documents, including RTGS forms and board resolutions, to illegally transfer funds,” the complaint says.
A senior officer of the Criminal Investigation Department that is probing the case said that a review of the corporation’s accounts thus far show unauthorised transfers totalling ₹94.73 crore. There were also suggestions that the accused used provisions of the Election Commissions Model Code of Conduct, in force since March 17 when general elections were announced, to their advantage. “The bank did not send any email notifications or send messages to any mobile numbers related to these transactions, leaving the corporation uninformed about the transfers. We are investigating whether this was due to the Model Code of Conduct(in place since March 17) as they have claimed, or if there was someone from the corporation that was involved in this,” the officer said.
The Political Fallout
On Tuesday, Scheduled Tribes Welfare Minister B Nagendra said that ₹28 crore has been recovered. “We have spoken to the chairman and directors of the Union Bank of India, and everyone has said that they will refund ₹50 crore by Tuesday evening,” the minister had said.
“Whoever is involved in it and however influential they are, we will not spare them. Chief minister Siddaramaiah and deputy chief minister DK Shivakumar have taken it seriously. If the forensic report says that the MD had signed off on it, then we will suspend him. We will not let the leakage of public money happen,” the minister said.
Karnataka BJP president BY Vijayendra, however, demanded the resignation of Nagendra and a CBI investigation, threatening statewide protests if the demand was not met within a week. ‘’It is impossible for CID or local authorities to investigate the case impartially. Officials have taken the pen drive and laptop from the house of the deceased,’’ he said.
Expelled BJP veteran and former deputy CM KS Eshwarappa, who was forced to quit as minister in the previous BJP govt following a similar incident, said Nagendra should be sacked from the cabinet. Eshwarappa had to tender his resignation to Chief Minister Basavaraj Bommai after contractor Santosh Patil ended his life alleging the minister had sought kickbacks. “Why these double standards now?” said Eshwarappa.
Home minister G Parameshwara, however, said investigating officials will probe all aspects, including, if the money was transferred with the minister’s knowledge.
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