SIT arrests suspended managing director and accountant

Bengaluru: The Special Investigation Team (SIT) has arrested two persons, including the suspended managing director, for alleged misappropriation of public funds at the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation. JG Padmanabha, the managing director, and Parashurama G, the accounting officer, were arrested late on Friday night after the government constituted the SIT.

The investigation team produced the duo before a judge on Saturday and was sentenced to six days in custody, well-informed sources said. DHA source familiar with the investigation said the SIT has begun investigating the role of the two men in the alleged scam.

The government suspended Padmanabha and Parashurama on May 29 for “dereliction of duty, negligence and violation of financial regulations”. The unauthorised transfer of Rs 187 crore belonging to the company came to light after the head of accounts, Chandrashekhar, committed suicide at his Shivamogga residence on May 26. The money was transferred from the company’s bank account at the MG Road branch of Union Bank of India to other branches of the same bank in March 2024.

It was also alleged that Rs 89.62 crore was transferred to “known” IT companies and a Hyderabad-based cooperative bank. The deceased had left behind a note alleging misappropriation of funds and blaming Padmanabha, Parashurama and Union Bank of India chief Suchismita Rawal for his death.

In the note, Chandrashekhar allegedly claimed that the minister had given verbal instructions for the transfer of funds. The state-run company is under Karnataka’s tribal welfare minister B. Nagendra. However, Nagendra’s name was not explicitly mentioned in the note.

The opposition BJP is demanding the minister’s resignation and a probe by the Central Bureau of Investigation (CBI). “There will not be two investigations. But if it happens, it will be handed over from the CID to the CBI,” said Home Minister G Parameshwara, adding that the CBI can step in if there are frauds of Rs 30 crore and above in state-run banks.

On Friday, DH reported that a bank account named Happiest Minds Technologies Ltd at RBL Bank is listed as the beneficiary of Rs 4.53 crore from the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation. In a statement on Saturday, Happiest Minds, promoted by IT veteran Ashok Soota, denied having any links with the bank account (00015010055200010).