The Karnataka Congress party is facing a significant challenge as the Enforcement Directorate (ED) has launched raids against its Bellary MP, E Tukaram, and three of its Members of the Legislative Assembly (MLAs) in connection with the ongoing investigation into the Valmiki Corporation scam. The raids, conducted on Wednesday, June 11, 2025, signal an escalation in the probe into alleged financial irregularities within the state-run Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation (KMVSTDC).
The ED's action is rooted in First Information Reports (FIRs) filed by the Karnataka Police and the Central Bureau of Investigation (CBI), which point to a large-scale diversion of funds from the KMVSTDC's accounts. These funds, intended for the socio-economic development of Scheduled Tribe (ST) communities in Karnataka, were allegedly funneled into "fake accounts" and subsequently laundered through shell entities. The central allegation is that a portion of the siphoned funds was utilized during the 2024 Lok Sabha elections in the Bellary constituency.
Raids were conducted at multiple locations, including the residences and offices of Bellary MP E. Tukaram, Ballari City MLA Nara Bharat Reddy, Kampli MLA J.N. Ganesh, and a close associate of Ballari Rural MLA B. Nagendra. Additionally, the residence of Kudligi MLA N.T. Srinivas was also searched. ED officials are currently scrutinizing documents and other materials seized from these locations.
The Valmiki Corporation scam initially surfaced in 2024 following the suicide of Chandrashekaran P, the corporation's accounts superintendent. In his suicide note, Chandrashekaran alleged illegal transfers of money from the corporation to various accounts, implicating several officials. The Union Bank of India, in its complaint to the CBI, alleged embezzlement of funds amounting to ₹88 crore.
The ED's investigation suggests that approximately ₹89.62 crore was diverted into 18 fake accounts in Andhra Pradesh and Telangana, allegedly at the behest of former Scheduled Tribes Welfare Minister B. Nagendra. These funds were then layered through fake and shell accounts, with cash and bullion distributed among the accused.
The ongoing investigation has already led to significant political fallout. B. Nagendra, who previously served as the Minister for Scheduled Tribes Welfare, resigned from his position in June 2024 after the scam came to light. He was later taken into custody by the ED and named as the primary accused in a chargesheet filed in September 2024. The Governor of Karnataka has granted sanction for his prosecution in April 2025, paving the way for the court to take cognizance of the chargesheet.
The ED's involvement marks the third agency probing the alleged scam, alongside a Special Investigation Team (SIT) formed by the State Government and the CBI. While the SIT's investigation did not find Nagendra culpable, the ED's chargesheet alleges his central role in the diversion of funds.
The raids on E Tukaram and the three MLAs, along with the ongoing legal proceedings against B. Nagendra, have put the Karnataka Congress on the defensive. The opposition is likely to seize upon these developments to attack the ruling party's image of probity and good governance. The coming days will be crucial as the ED continues its investigation and unearths further details about the extent and beneficiaries of the Valmiki Corporation scam.
