Funds Diverted from Government Department (KMVSTDCL and KGTTI) in Union and Canara Bank

CBI carried out searches on 15 September 2025 at 16 places in Karnataka and Andhra Pradesh in connection with the Valmiki Corporation case (Bangalore) relating to siphoning of government funds. The searches were conducted at the premises of the sister, brother-in-law, personal assistant, and other close associates of the then Karnataka Minister. These searches resulted in the recovery of incriminating documents and details of vehicles suspected to have been purchased using diverted funds.

The case was registered on 3 June 2024 by CBI on the basis of a written complaint from the Deputy General Manager of Union Bank of India. The complaint alleged cheating, forgery, and criminal misappropriation of funds amounting to Rs 84.63 crore through illegal transfer and withdrawal from the accounts of Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL), a Government of Karnataka undertaking, maintained at Union Bank of India, MG Road Branch, Bengaluru, during the period 21 February 2024 to 6 May 2024. The Hon’ble High Court of Karnataka has been monitoring the investigation, and four status reports have so far been filed by CBI before the court.

During the investigation, further instances of diversion of government funds during 2024, belonging to the Scheduled Tribes Welfare Department and the Karnataka German Technical Training Institute (KGTTI), were established. Based on a status report submitted by CBI, the High Court granted permission to also investigate these additional allegations.

The ST Welfare Department falls under the administrative control of the Scheduled Tribe Welfare Ministry. The probe revealed that Rs 2.17 crore of ST Welfare Department funds were transferred from an account at Bank of Baroda, Siddaiah Road Branch, Bengaluru, through intermediary firms, into the account of a private company owned by a close associate of the then Minister of Scheduled Tribe Welfare. Out of these funds, about Rs 1.20 crore were further routed into the accounts of the minister’s sister, brother-in-law, and personal assistant. Funds were also transferred to the owner of a farmhouse in Bellary where the minister frequently stayed.

Similarly, Rs 64 lakh belonging to KGTTI were diverted from its account at Canara Bank, Wilson Garden (Hombegowdanagar) Branch, Bengaluru, into the accounts of the brother and nephew of a close associate of the then Minister, again routed through intermediaries.

The investigation of the case is still in progress. More details will be released soon.