CBI files three chargesheets in Karnataka Valmiki corporation funds case

What the Record Shows

The Central Bureau of Investigation has filed three separate chargesheets over the alleged diversion of funds meant for Scheduled Tribe welfare in Karnataka, naming a former state minister among the accused. The agency filed the three chargesheets on 2 June 2026 before the competent court, relating to the Karnataka Maharishi Valmiki Scheduled Tribes Development Corporation, the ST Welfare Department and a state training institute, and named the former minister B Nagendra in all three, per the chargesheets.

Alongside Mr Nagendra, the CBI has named the corporation's managing director Padmanabha J G, Nekkanti Nagaraj and the Hyderabad businessman G Satyanarayana Varma among about 30 persons implicated across the filings. Each is an accused person. None has been convicted, and the presumption of innocence applies to all of them. Mr Nagendra, who resigned from the state cabinet in June 2024, has denied the allegations.

The CBI's chargesheet alleges that about Rs 89.63 crore was siphoned from roughly Rs 187 crore pooled into the corporation's Union Bank of India account. A related Karnataka High Court order records the state case figure of about Rs 94.73 crore diverted, through 18 transactions, out of Rs 187.33 crore deposited into Union Bank account no. 520141001659653 between March and May 2024, in Crime No. 118 of 2024. The state first information report invoked provisions of the Indian Penal Code including Sections 120B, 409, 420, 467, 468 and 471 and Section 13 of the Prevention of Corruption Act, per the High Court order dated 1 September 2025.

The matter surfaced in mid-2024 after the accounts superintendent of the corporation died by suicide on 26 May 2024, leaving a note that, as recorded in the case papers, alleged pressure and irregularities in the handling of funds, and after the Union Bank of India complained about transactions at one of its branches. The investigation was triggered by those events.

How It Worked

The CBI alleges that 18 bogus bank accounts were opened in the names of fictitious firms using forged registration certificates and fabricated know-your-customer documents. That characterisation is the agency's allegation, set out in its chargesheets, and it has not been tested at trial.

According to the CBI, corporation funds earmarked for Scheduled Tribe welfare were diverted out of the corporation's account through forged cheques and RTGS transfers into those accounts. The agency alleges the money was then layered through nearly 600 bank accounts before being converted into cash, bullion and vehicles, a process designed, on its case, to break the audit trail between the corporation's treasury and the ultimate beneficiaries of the diversion.

The premise of the case, as the agencies frame it, is that control over a state welfare corporation's account, combined with the managing director's signing authority, was what allegedly enabled money to leave the account at all. The Karnataka High Court order records that roughly Rs 187.33 crore was deposited into a newly opened Union Bank account in a compressed window between March and May 2024, and that about Rs 94.73 crore was diverted through 18 transactions, per the FIR in Crime No. 118 of 2024.

The case has run on more than one track. A Karnataka Police Special Investigation Team began the state prosecution; the Enforcement Directorate opened a money-laundering investigation under the Prevention of Money Laundering Act, took Mr Nagendra into custody in July 2024, and in December 2025 provisionally attached four immovable properties it valued at about Rs 8.07 crore belonging to him. The ED has also searched the premises of a sitting Congress MP and three MLAs in connection with the case; on this record those persons were searched, not named as accused. The CBI subsequently filed the three chargesheets in June 2026.

Every wrongdoing claim above is the allegation of an investigating agency. A chargesheet, and a provisional attachment, contain allegations, not findings of guilt; the accused are presumed innocent until proven guilty, and due process continues.

Who Lost Money

On the agencies' case, those ultimately deprived were the Scheduled Tribe beneficiaries of Karnataka welfare schemes, for whom the corporation's funds were earmarked and who, the CBI alleges, did not receive money that was diverted instead. The corporation is a state vehicle for channelling development funds to a specific community, so the alleged harm falls on intended recipients of public welfare rather than on retail investors or depositors.

The figures remain allegations at this stage. The CBI's chargesheet puts the siphoned sum at about Rs 89.63 crore; the state case, as recorded by the High Court, refers to about Rs 94.73 crore diverted. The ED's attachment of four properties worth about Rs 8.07 crore is a provisional step against a fraction of the alleged sum, not a recovery returned to the corporation.

No court has yet determined a loss or ordered restitution, because the trial has not been held. What beneficiaries have actually recovered, if anything, is not established on the present record.

Where It Stands Now

The case is at the post-chargesheet, pre-trial stage. With the CBI's three chargesheets filed on 2 June 2026, the matter now moves towards the framing of charges and trial before the competent court; the ED's parallel money-laundering proceeding, including the attachment of four properties, remains live.

At the High Court, an accused's attempt to quash the proceedings and challenge his June 2024 arrest was dismissed on 1 September 2025, the court declining to entertain a successive petition on grounds that had been available earlier. Mr Nagendra resigned his cabinet post in June 2024 and was taken into ED custody the following month. The persons whose premises the ED searched but did not charge are not, on this record, accused.

Because the matter is pre-conviction, the presumption of innocence applies to every person named. A chargesheet and a provisional attachment reflect allegations and an investigative view; they are not findings of guilt, and the trial will decide the issue.

What It Means

The case illustrates why welfare corporations, which pool large public sums into single accounts for onward disbursal, are a point of concentrated risk, and why the controls around such accounts, from account-opening checks to cheque authorisation, matter so much on the agencies' account of how the money is said to have moved. The alleged use of forged KYC documents to open fictitious accounts, and layering through hundreds of accounts, is the pattern the CBI describes; whether it is proved is for the trial.

For a reader following enforcement news, the useful discipline is to hold the figures at arm's length until a court adopts them. A chargesheet sum of Rs 89.63 crore and a state-case figure of Rs 94.73 crore are allegations recorded in filings, not a judicially determined loss, and a provisional attachment is a step to preserve assets, not a recovery. It is also worth noting who is an accused and who was merely searched, a distinction the record itself preserves.

The enforcement archive is at /news?cat=enforcement. Comparable public-office matters are covered in our reports on the Chhattisgarh coal levy chargesheets and the Delhi court framing charges in the land-for-jobs case.

FAQ

Does a chargesheet mean the people named are guilty?

No. A chargesheet contains allegations, not findings of guilt; the accused are presumed innocent until proven guilty, and due process continues. The CBI filed three chargesheets on 2 June 2026 naming about 30 persons, but no court has convicted anyone in this matter, and the charges remain to be tried.

What does the CBI allege happened?

The CBI alleges that 18 bogus bank accounts were opened using forged registration certificates and fabricated KYC documents, and that corporation funds meant for Scheduled Tribe welfare were diverted through forged cheques and RTGS transfers, then layered through nearly 600 accounts and converted into cash, bullion and vehicles. These are allegations that have not been tested at trial.

How much money is alleged to have been diverted?

The CBI's chargesheet alleges about Rs 89.63 crore was siphoned from roughly Rs 187 crore pooled into the corporation's Union Bank account. A Karnataka High Court order records the state case figure of about Rs 94.73 crore diverted from Rs 187.33 crore. Both are allegations, not a judicially determined loss.

What has the Enforcement Directorate done?

The ED opened a money-laundering investigation, took the former minister B Nagendra into custody in July 2024, and in December 2025 provisionally attached four immovable properties it valued at about Rs 8.07 crore. It also searched the premises of a sitting MP and three MLAs, who on this record were searched, not named as accused.

Where can I read the official record?

A Karnataka High Court order in the matter, which sets out the FIR allegations and the account details, is available on the public judgments database, linked below. The CBI chargesheets are before the competent court in Karnataka.

This report is based on the Karnataka High Court order dated 1 September 2025 in Sri G Satyanarayana Varma vs State of Karnataka and the CBI's chargesheets as reported, reviewed on 1 August 2026.