Karnataka Minister B Nagendra Quits Amid Row Over Illegal Money Transfer

Karnataka Minister B Nagendra, facing allegations in connection with an illegal money transfer case involving a state-run corporation, on Thursday resigned from the Ministry, in a setback to the one-year-old Siddaramaiah-led Congress government.

The Scheduled Tribes Welfare Minister tendered his resignation letter to the Chief Minister and said he would come clean in the case.

The illegal money transfer issue, involving Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd, came to light, after its Accounts Superintendent, Chandrashekhar P, died by suicide on May 26, leaving behind a death note.

The note revealed the unauthorised transfer of Rs 187 crore belonging to the state-run Corporation from its bank account, and from that, Rs 88.62 crore was illegally moved to various accounts allegedly belonging to "well-known" IT companies and a Hyderabad-based cooperative bank.

Chandrashekhar has named the Corporation's now-suspended Managing Director J G Padmanabh, accounts officer Parashuram G Durugannavar, and Union Bank of India Chief Manager Suchismita Rawal in the note, while also stating that the "Minister" had issued oral orders for transferring the funds.

"No one pressured me to resign. With my conscience and to ensure that people are not misled (about me). I have voluntarily... (decided to resign)," the 52-year-old four-time MLA said hours before resigning.

Speaking to reporters here, Nagendra, also the Youth Empowerment and Sports Minister, said he doesn't want to cause embarrassment to the Chief Minister or Deputy Chief Minister D K Shivakumar or party national President M Mallikarjun Kharge.

"With my own free will, I'm resigning...SIT is probing the case, there should be a fair probe. If I'm in the Minister post during the probe it may cause problems. Considering this, I have come to this decision (to resign)," the Bellary Rural MLA said while terming the charges against him as "baseless".

He said he will come out as "innocent".

Earlier in the day, Shivakumar said, "Not wanting to embarrass the party, he (Nagendra) voluntarily came forward and has resigned. We did not ask him to resign. We had a discussion with him." "We too had discussions with several people, no Minister will show courage to misappropriate such a huge amount of money. It is not easy," he added.

Calling allegations regarding involvement of people linked to him in the case as "speculations", Nagendra, regarding the deceased officer mentioning about a "Minister" in his death note said, "he has not mentioned my name anywhere. Minister means, which Minister?" "The things that have happened at the corporation were not known to me, and on coming to know I had suspended the MD (of corporation) and the probe is on," he said.

Nagendra also claimed that the CM and Deputy CM did not seek his resignation and rather insisted that he should not resign.

"From the probe, the truth will come out, after that I will come....Taking me back into cabinet on being proved innocent is left to the discretion of the CM and the high command," he added.

Siddaramaiah, earlier today, said he will take a decision on seeking resignation of Nagendra, after talking to the Special Investigation Team (SIT) formed to probe the multi-crore scam and discussing with senior Cabinet colleagues.

Siddaramaiah and Shivakumar, who is also the state Congress President, are said to have held a meeting on Wednesday after news broke about the CBI filing an FIR based on a complaint filed by the Union Bank of India, sources said.

They reportedly summoned Nagendra and explained the circumstances and asked him to step down, and also assured him that he would be reinstated if his name was cleared from the charges.

Mumbai-headquartered Union Bank of India last week filed a formal complaint with the CBI in connection with embezzlement of money belonging to the Corporation involving its MG Road branch. It had also suspended three officials.

The Corporation had filed an FIR against top Union Bank of India officials with the police, over embezzlement of Rs 88 crore.

The CBI has taken up a probe into the case, Home Minister G Parameshwara had said on Wednesday, while adding that the Cabinet will take a call on handing over to the CBI investigation covering the state government departments linked to the case, once it gets a formal request from the central agency.

Last week, the state government had constituted an SIT headed by Manish Kharbikar, Additional Director General of Police, Economic Offences, at the Criminal Investigation Department (CID) here, to conduct the probe.

Meanwhile, a delegation of BJP leaders led by its state President B Y Vijayendra and Leader of Opposition in the Assembly, R Ashoka held a march to Raj Bhavan and petitioned the Governor, urging him to seek the Chief Minister's and Nagendra's resignation.

"A big corruption scam has happened in the state, where the money kept for the development of ST community has been illegally transferred to more than 18 fake bank accounts in Hyderabad, this cannot happen without the approval of the Finance department," Vijayendra said.

"The Chief Minister also holds the charge of the Finance Department, and such a big scam would not have happened without it coming to his notice, just the Minister's resignation will not do justice, the Chief Minister is also responsible, and his resignation should also be sought," he said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)